Brent crude dips below $ 58 on strong dollar and supply

Wednesday, 11 March 2015 00:00 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): Brent crude futures dipped below $ 58 a barrel on Tuesday as the dollar hit multi-year highs and the oil market remained hobbled by oversupply and weak demand. The US dollar hit a near 12-year peak against the euro and an eight-year high against the yen, hurting commodities priced in dollars by making them more expensive for holders of other currencies. At 1131 GMT, Brent was down 79 cents at $ 57.74, while U.S. crude was 45 cents lower at $ 49.55. Traders and analysts said there was a risk of further falls as speculative net long positions were so high, particularly in Brent, whilst the fundamental picture remained one of weakness with no sign of any slowdown in production. “In order to balance the market we need the supply glut to be brought down, by rising demand or lower supply,” Ole Hansen, senior commodity strategist at Saxo Bank, said. Demand from China, the world’s second-largest oil consumer, slowed in February as the Lunar New Year holiday cut into shipping volumes. At the same time, global refinery maintenance is about to peak, with global offline capacity assessed at 5.7 million barrels per day (bpd) in April, according to Energy Aspects. “Most of the supportive factors for Brent are starting to fade,” they said in a note on Tuesday, pointing out that supplies hit by weather and technical issues were returning. Libya is expected to export more than two million barrels of crude oil this week from two ports in the east, where output has topped 245,000 bpd.