MARKET WATCH: Oil prices fall on stronger US dollar, world oil glut

Crude oil prices fell on the New York and London markets Nov. 27, which analysts attributed to concerns about a strengthening US dollar and a lingering world oil glut. Oil trades in dollars so a stronger dollar makes oil more expensive for buyers using other currencies.

The Wall Street Journal Dollar Index reported the dollar rose 0.3% on Nov. 27 against a basket of other currencies.

Jason Gammel, Jefferies analyst, said inventory overhangs dominated crude oil markets and likely will constrain oil prices in the near term pending a regular meeting of members of the Organization of Petroleum Exporting Countries in Vienna scheduled for December.

“Crude and product inventories are building in the US with the market expected to remain oversupplied through the first half of 2016,” Gammel said.

The January crude oil contract on the New York Mercantile Exchange fell $1.33 on Nov. 27 to $41.71/bbl. The February contract dropped $1.33 to $43.06/bbl.

The NYMEX natural gas contract for January lost 8.7¢ to $2.21/MMbtu. The December contract settled at a rounded $2.21/MMbtu when it expired on Nov. 25 before the Thanksgiving holiday in the US. The Henry Hub gas price was unavailable for Nov. 27.

Heating oil for December delivery fell 5¢ to a rounded $1.35/gal. The price for reformulated gasoline stock for oxygenates blending for December was down less than a penny to remain at a rounded $1.39/gal.

The January ICE contract for Brent crude fell 60¢ to $44.86/bbl. The February contract dropped 68¢ to $45.51/bbl. The ICE gas oil contract for December closed at $418.25/tonne on Nov. 27.

The average price for OPEC’s basket of 12 benchmark crudes for Nov. 27 was $39.08/bbl, down 57¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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