Soaring US crude production and the resuming of operations of North Sea’s Forties pipeline have caused oil prices to slump to their lowest in six weeks.
Brent crude futures LCOc1 fell 14 cents to reach $65.37 a barrel, while US futures CLc1 fell 15 cents to reach $61.64, according to Reuters.
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The latest fall is a continuing trend of declining oil prices, supported by volatility in financial markets across the globe.
Last month, Brent futures breached the $71 per barrel level and since then they recorded a drop of around 8%.
Stronger dollar, triggered by the US Government bond yields rising to their highest in four years this week, has prompted non-US investor to sell oil.
PVM Oil Associates strategist Tamas Varga was quoted by the news agency as saying: “This is more a timely correction. I don’t believe it’s going to come significantly lower.
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By GlobalData“The ten-year yields went higher again yesterday so, if you believe in this sort of inverse correlation, then that is bearish as well.”
The Forties pipeline, which is a major pipeline system in the North Sea, was closed on Wednesday after a feed control valve closed at the Kinneil facility and the restart hit the oil prices already hit by growing US crude output.
Based on the government data, average US production for this year is expected to reach 10.59 million barrels per day.
