Oil falls 5 percent on supply woes; euro up before French vote

Thu May 4, 2017 4:31pm EDT
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By Rodrigo Campos

NEW YORK (Reuters) - Crude oil prices tumbled on Thursday, erasing the gains made since a production cut deal last November, while the euro strengthened against the U.S. dollar as a pro-European Union centrist looked set to win the French presidency.

Corporate results boosted European stocks to their highest in almost two years, while losses in energy shares and gains in the healthcare sector kept Wall Street little changed.

Oil prices fell to the lowest since late November on signs that OPEC and other producing countries would not take more drastic steps to reduce the world's persistent glut of crude.

U.S. crude fell 5.06 percent to $45.40 per barrel and Brent was at $48.35, down 4.8 percent on the day.

"While (OPEC) is expected to extend a self-imposed production cap by another six months, it will be a challenge to convince several non-OPEC members to follow suit," said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics.

"Persistent growth in U.S. oil production ... will also make extensions of the OPEC cap beyond 2017 unlikely."

Bets on the U.S. Federal Reserve raising rates next month rose to a 74 percent chance from 71 percent Wednesday, with help from data showing further tightening in the labor market.

In a statement after a two-day policy meeting Wednesday, the Fed downplayed other recent weak economic data and said consumer spending remained solid, business investment had firmed and inflation was close to its target.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 4, 2017. REUTERS/Brendan McDermid