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May 31, 2015

Crude oil prices drop due to strengthening dollar

Prices of crude oil dipped on Monday due to an increase in the dollar value anticipation that the Organization of the Petroleum Exporting Countries (OPEC) countries will be keeping production high.

Prices of crude oil dipped on Monday due to an increase in the dollar value anticipation that the Organization of the Petroleum Exporting Countries (OPEC) countries will be keeping production high.

Front-month Brent crude declined $1.00 a barrel to a low of $64.56, while the US light crude dipped 75 cents at $59.55 a barrel, Reuters reported.

Other currency holders find oil to be expensive as the dollar value gained 0.3% against a basket of currencies.

A monthly survey conducted by the news agency revealed that in May OPEC pumped 31.22 million barrels of oil per day (bpd), which is at a two-and-a-half year high.

The cartel comprising 12 member is set to meet in Vienna on Friday and could continue to produce at the current rate, weighing on the crude prices.

The oil prices rose despite the decline in the number of oil rigs with 13 rigs idled.

It could not impact the oil prices as analysts believe that the US crude oil production is expected to see growth despite the fall in rig numbers.

Goldman Sachs said that US oil production is set to witness a 155,000 bpd growth in the fourth quarter of 2014.

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