Oil markets have not been helped by a fall in US crude stockpiles due to the strengthening dollar continuing to weigh on fuel prices.
Brent crude futures, the international benchmark, dropped 42 cents, or 0.6%, to touch $65 a barrel, while US West Texas Intermediate (WTI) crude futures fell 53 cents, or 0.9%, to trade at $61.15 a barrel, according to Reuters.
The rise in dollar has been supported by reports from the US Federal Reserve’s intention to raise interest rates.
Futures brokerage OANDA Asia-Pacific trading head Stephen Innes was quoted by the news agency as saying: “The firming dollar continues to thwart investor sentiment despite the bullish inventory data.”
The possible increase in oil prices in the wake of a firmer dollar is expected to hit imports.
Data released by the American Petroleum Institute revealed that US crude oil inventories fell 907,000 barrels to 420.3 million for the week to 16 February.
However, the drop in inventories has been offset by the firm dollar.
Innes further added: “Improved pipeline infrastructure to the Gulf coast and the decreased supply via TransCanada’s Keystone pipeline, sent inventories tumbling.”
The reported decline points to increased consumption of crude oil.
Oil prices have been receiving support from the OPEC and Russia through their efforts to curb excess supply.
Since January last year, the producers group has been engaged in production cuts.