Crude prices dropped from a six month high to end lower on a robust dollar and renewed fears over the global glut continuing after the International Energy Agency warned that the sudden surge in demand for the commodity was set to end.
Light sweet crude for July delivery ended down by 66 cents or 1.1% at $60.07 a barrel on the New York Mercantile Exchange after hitting six month highs in the previous session.
Brent Futures, the global benchmark settled 60 cents or 0.1% lower at $65.11 a barrel on the London based ICE Futures Exchange.
“This is a market that’s becoming increasingly frustrating for both bulls and bears, because it’s very tightly range bound and there are good arguments on both sides for why prices should go up or down,” Bill O’Grady, chief market strategist at Confluence Investment Management, told the Wall Street Journal.
“We’re going to be stuck in this for a while.”
Crude futures have recorded marginal gains as traders weigh the surge in demand and decline in drilling against the current oversupply of the commodity.
The international Energy Agency, however, warned that most of the factors supporting the recent surge in demand, like unexpectedly cold weather in Europe in 2015 raising the heating costs, were transitory and unlikely to recur.
It cited consistently high levels of oversupply in the oil market in light of increased US crude output and record production levels by the Organization of Petroleum Exporting Countries.
The agency however still lifted its demand outlook for 2015 by an additional; 300,000 barrels per day to about 94 million barrels a day.
Also weighing the commodity down were news from Greece after the International Monetary Fund Reported that its team of negotiators had exited the talks with Greece citing lack of progress on a potential bailout deal.
“Oil continues to slip and slide when it gets bad news out of Greece,” Phil Flynn, analyst at Chicago-based Price Futures Group, told Reuters.
“There’s still some uncertainty about the market’s near-term direction.”
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