Oil prices ended lower -the first time in three days- as the dollar strengthened against a basket of foreign currencies and traders looked ahead to an OPEC meeting expected to keep production high.
Light sweet crude for July delivery settled down 10 cents or 0.2% at $60.20 a barrel on the New York Mercantile Exchange. The US benchmark had ended more than 5% higher on Friday on reports of a bigger than expected drop in the number of active oil rigs in the US.
Brent futures, the global benchmark settled 68 cents or 1% lower at $64.88 a barrel on the London based ICE Futures Exchange.
The dollar resumed its rally against foreign currencies on Monday on a bag of mixed economic reports after weakening slightly on Friday.
A stronger greenback is bearish for the demand of commodities denominated in dollars like oil as it makes them expensive to holders of foreign currencies.
A survey conducted by The Wall Street Journal also saw that the Organization of Petroleum Exporting Countries was likely to maintain their output quota at 30 million barrels per day when oil ministers from the organization countries meet in Vienna on May 5.
OPEC exceeded its collective target for the 12th straight month last month amid a stalling in the recovery of oil prices from a 6 year low on fears of oversupply and tepid demand.
Saudi Arabia, the world’s biggest exporter of oil pumped more than 10.5 million barrels a day in May, to match the highest level recorded by Bloomberg since 1989, and sustain fears of a glut.
“OPEC isn’t expected to do anything supportive at the meeting Friday,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, told Bloomberg by phone.
“The dollar’s return to rally mode is weighing on the market today. The combination of OPEC and the dollar should set us up for a down week.”
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