Oil prices slide on high supplies
Surging US stockpiles and a rebounding dollar sent oil prices sliding Thursday after strong gains caused by reduced expectations of an early hike to US interest rates, analysts said.
US benchmark West Texas Intermediate (WTI) for delivery in April shed $1.24 to $43.42 a barrel.
Brent North Sea crude for May delivery tumbled $1.69 to stand at $54.22 in late London deals.
WTI had gained $1.20 Wednesday and Brent jumped $2.40 after the US central bank signalled it was in no hurry raise rates, which sent the dollar tumbling.
A weaker US currency makes dollar-priced oil cheaper for holders of rival currencies, fuelling demand. The dollar rallied Thursday, causing the reverse.
An oversupplied oil market and weaker demand has meanwhile taken hold of sentiment following the US crude inventory report, analysts said.
The US Department of Energy on Wednesday said crude stocks jumped 9.6 million barrels for the week ending March 13.
"The report indicates a build up in the global supply glut that has been pushing prices down thus far," said Shailaja Nair, associate editorial director at energy information provider Platts.
Daniel Ang, an investment analyst with Phillip Futures in Singapore, said prices would remain under pressure for as long as supply was outpacing demand.
"Fundamentals have not changed and just a short-term jolt in prices from the weakening US dollar will not change that fact," he said in a market commentary.
"Prices are still going to stay low if demand and supply does not improve."
World oil prices have collapsed by about 60 percent since June, with the strong US production exacerbating elevated output by the OPEC cartel.
OPEC members meanwhile have no choice but to maintain current production levels despite falling oil prices in order to preserve their market share, Kuwait's oil minister said on Thursday.
"Within OPEC, we don't have any other choice than keeping the ceiling of production as it is because we don't want to lose our share in the market," Ali al-Omair told reporters.
But the minister welcomed any arrangements with non-OPEC crude producers to stabilise the market.
"If there is any type of arrangements with countries outside OPEC, we will be very happy," Omair said after signing a cooperation agreement on oil and investment with Russia.
The 12-member Organization of Petroleum Exporting Countries, that pumps about one-third of the world's oil, decided in November to maintain production unchanged, sending oil prices crashing.
© 2015 AFP