On Thursday crude oil futures slid in Asian trade amid worries over higher supply as well as cautious ahead of U.S. non-farm payroll data, which could have a bearing on the timing of U.S. interest rate increases.
In the past week, prices have been volatile after a sharp rally in the past one-and-half months.
Light, sweet crude futures for delivery in June on the New York Mercantile Exchange was trading above $60 a barrel for the second consecutive day, despite decline. Recently, it was trading at $60.59 a barrel, 35 cents lower from the previous close in the Globex electronic session, MarketWatch reports.
On London’s ICE Futures exchange Brent crude for June delivery fell 34 cents to $67.43 a barrel.
Market players now await the release of US non-farm payroll data, which would provide clues as to the Federal Reserve’s timing for interest rate increases, which could in turn have a bearing on the dollar’s strength.
Higher rates will give a further boost to the dollar and pressure commodity prices, including oil, as crude oil is priced in dollars and a stronger U.S. currency would make the fuel more expensive for buyers in other currencies.
An ANZ report said latest U.S. data that showed a rise in gasoline inventories has also stoked fears of weaker demand going into the northern hemisphere summer.
Comments from Iran’s oil
minister, who has indicated its output would increase to 3.8 million
barrels a day within six months if sanctions are lifted, also put the sentiment under pressure.
A
report by Capital Economics indicated that the chance of a rebound in U.S. oil rigs and output have also
increased as oil prices are now about 40% above their recent lows.
“This should limit the upside for prices over the rest of this year,” it added.
