Oil falls as stronger dollar outweighs OPEC deal optimism

Thu Nov 17, 2016 3:49pm EST
 
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By Ethan Lou

NEW YORK (Reuters) - Oil prices settled slightly lower on Thursday, then fell as much as 1 percent in the after-market session as a stronger dollar outweighed expectations of an OPEC deal to limit production.

Oil started the day in the positive, with U.S. crude briefly up by as much as $1, on optimism that the Organization of the Petroleum Exporting Countries (OPEC) would reach an agreement to cap production at its meeting in Vienna on Nov. 30.

Saudi Energy Minister Khalid al-Falih said he was optimistic about OPEC's deal to limit oil output, while Venezuelan President Nicolas Maduro said OPEC members are ready to reach a "forceful" agreement, following a meeting with OPEC Secretary-General.

But prices fell after the dollar index [.DXY] tapped a 13-1/2-year high on strong U.S. economic data and comments by U.S. Federal Reserve Chair Janet Yellen that bolstered the case for hiking interest rates next month. [USD/]

The stronger dollar makes the greenback-denominated crude more expensive for holders of other currencies.

"The strength in the dollar, that rate hike being priced in, is more of a concrete thing than the rumors and murmurs and ongoing rhetoric related to OPEC," said Matt Smith, director of commodity research at energy data provider ClipperData.

Brent crude LCOc1 settled down 14 cents a barrel at $46.49, before falling further to $46.12 by 3:21 p.m. (2021 GMT), down 51 cents, or 1.1 percent.

U.S. West Texas Intermediate crude CLc1 closed 15 cents lower at $45.42. It fell in post-settlement by 56 cents, or 1.2 percent, to $45,01.   Continued...

 
Vessels pass an oil refinery in the waters off the southern coast of Singapore, February 26, 2016. REUTERS/Edgar Su/File Photo