The rising US dollar has pushed global oil prices down, although further falls have been prevented by growing Chinese crude demand and OPEC-led supply cuts.
US West Texas Intermediate (WTI) crude futures fell by 11 cents, or 0.2%, trading at $56.58 a barrel. Brent crude futures dipped 8 cents, or 0.1%, trading at $62.12 a barrel, according to Reuters.
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Traders opined that a stronger dollar had an influence on prices, jumping more than 0.9% this month against a number of other currencies.
According to the news agency, Bank of America Merrill Lynch (BoAML), in its 2018 outlook, stated: “A strong US dollar could act as a headwind to commodities.”
China is set to overtake the US as the world’s biggest crude importer.
Based on data from the General Administration of Customs, China’s crude oil imports increased to 37.04 million tonnes last month.
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By GlobalDataBMI Research was quoted by the news agency as saying: “China’s crude oil imports will continue to rise over the coming years, as output declines from several of its giant onshore fields … This will inevitably see China become more reliant on crude oil imports over our forecast period, with import dependency set to increase from a record 68% in 2017 to nearly 80% by 2021.”
BoAML forecasts Brent crude oil to reach the $70 per barrel mark by mid-year.
OPEC and other producers such as Russia have been involved in a price stabilisation programme through a reduction in output, which was initially set to expire in March next year.
In a recently concluded agreement, producers opted to extend the production cut until the end of next year.
However, rising US production continues to pose challenges to the oil markets.
