London: Brent crude oil slipped to a one-month low below $56 a barrel on Wednesday before steadying as a rally in the US dollar and global oversupply weighed.
The US dollar hit a fresh 12-year high against the euro on Tuesday, trading at $1.0637 against the single currency. A stronger dollar makes commodities priced in the greenback more expensive for holders of other currencies.
Russia’s crude oil exports are also set to rise this year, Energy Minister Alexander Novak said, despite some expectations of a plunge in production due to lower prices following the crash from above $100 a barrel last year.
“We expect more downward pressure today,” said Phillip Futures oil analyst Daniel Ang in Singapore, after Brent fell more than 3 per cent on Tuesday.
Brent for April delivery hit a one-month low of $55.92 a barrel before recovering to trade up 3 cents at $56.42 a barrel by 0919 GMT. It dropped $2.14, or 3.66 per cent, in the previous session.
West Texas Intermediate for April delivery climbed 16 cents to $48.45 a barrel after falling $1.71, or 3.42 per cent, on Tuesday. Its discount to Brent was at $7.97 a barrel, close to its narrowest in a month.
The US crude benchmark took some support from a surprise drop in crude stocks in the world’s largest oil consumer last week, with the American Petroleum Institute reporting a 404,000-barrel fall late on Tuesday. Analysts had expected a 4.4-million-barrel build.
Despite the draw, crude stocks rose by 2.2 million barrels at the Cushing, Oklahoma delivery point of the WTI contract, the API said, keeping price gains in check.
Traders are now waiting for official data from the US
Energy Information Administration at 1530 GMT on Wednesday to see whether it confirms the API numbers.
Prices took some support from stronger US economic figures. Job openings in the United States in January rose to the highest in 14 years, figures from the Labor Department showed on Tuesday, even as US sales recorded their biggest decline since 2009.
Traders were also watching supply risks in Libya, where two eastern oilfields have been shut following an attack by Islamist militants, an oil official said.
