Oil prices slumped on Wednesday, February 21, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and an expected rise in U.S. oil production.
Brent crude futures fell 60 cents, or 0.9 percent, from their last close to $64.65 per barrel.
U.S. West Texas Intermediate, WTI crude futures were at $61.07 a barrel at 0446 GMT, down 72 cents, or 1.2 percent, from their last settlement.
Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92 to $64.41 per barrel, as suggested by its wave pattern and a projection analysis.
Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies.
Also pressuring prices is surging U.S. production, now the world’s second-largest oil stream at more than 10 million barrels per day (bpd), only slightly behind Russia and ahead of top exporter Saudi Arabia.
“Bulging U.S. production will weigh on prices,” said Singapore-based Phillip Futures in a note on Wednesday.
The next set of weekly U.S. oil production data is due to be published by the Energy Information Administration (EIA) on Thursday after a one-day delay because of the President’s Day holiday on Monday.
That data will also include U.S. inventory figures that are expected to show crude oil stockpiles rose 1.3 million barrels in the week to Feb. 16, according to a Reuters poll. Oil product stockpiles, including gasoline and distillate fuels, are all expected to decline.
Despite the rising U.S. output, overall oil markets remain well supported due to healthy demand growth and supply restraint by the Organization of the Petroleum Exporting Countries (OPEC) that started last year to draw down excess global inventories, Reuters reports.
“A roughly balanced market is anticipated in calendar year 2018, with the risks around that view tilted toward surplus,” mining and energy giant BHP said in its economic and commodity outlook for the year, published this week.