Oil down 1 percent, pressured by glut, dollar, Nigeria outlook

Mon Aug 29, 2016 4:40pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices settled down more than 1 percent on Monday, snapping two consecutive days of gains, on renewed concerns about an oil glut, a stronger dollar and expectations that Nigerian rebels will stop hampering that country's crude output.

U.S. crude stockpiles likely rose for a second straight week last week, building by 1.3 million barrels, a Reuters poll showed.

That came on top of Iraq's pledge at the weekend to ship more crude after a ramp up of exports from its southern ports in August.

Nigerian rebels pledged to end hostilities against the industry in Africa's No. 1 producer, which they repeatedly attacked earlier this year by blowing up pipelines.

Fears of a renewed glut offset news that oil and gas operators in the U.S. Gulf of Mexico have shut production equal to 168,334 barrels per day of oil and 190 million cubic feet per day of natural gas as a precaution against a tropical storm. The closures represent 11.5 percent of oil output and 5.5 percent of gas production.

Brent crude LCOc1 settled down 66 cents, or 1.3 percent, at $49.26 a barrel.

U.S. West Texas Intermediate (WTI) crude CLc1 finished down 66 cents, or 1.4 percent, at $46.98.

"We've so much of oil coming on, and a near-term dollar rally, that these storm-related outages in the U.S. Gulf are barely a worry," said John Kilduff, partner at New York-based energy hedge fund Again Capital.   Continued...

A pumpjack drills for oil in the Monterey Shale, California, April 29, 2013.   REUTERS/Lucy Nicholson