Oil falls more than 1 percent on high OPEC output, firmer dollar
By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell more than 1 percent on Monday, retreating from the sharp rally of the previous session, on the impact of a strong dollar and worries of stubbornly high supplies as OPEC prepared to meet this week to stick to production targets.
The Organization of the Petroleum Exporting Countries pumped at a two-and-a-half year high of 31.22 million barrels of oil per day (bpd) in May, a Reuters monthly survey showed. [OPEC/O]
The boost from OPEC puts output further above its target of 30 million bpd, underlining the focus of top exporter Saudi Arabia and other key members on market share.
The group meets on Friday and is expected to maintain its current production policy, keeping the world oil market amply supplied for the foreseeable future.
"OPEC continues to produce well above target, and also well above demand for its oil," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
Brent crude oil futures LCOc1, fell $1.06, or 1.6 percent, to $64.50 a barrel by 11:21 a.m. EDT (1521 GMT. U.S. crude CLc1 was down 73 cents, or 1.2 percent, at $59.57 a barrel
Both benchmarks had jumped 5 percent on Friday, their strongest gain in 1/-1/2 months, amid a stall in the dollar's .DXY rally.
The dollar, which has surged lately on speculation of a U.S. rate hike before the year end, hit session highs on Monday after stronger-than-expected U.S. construction spending and Greek debt woes. Continued...