Brent crude oil slipped further below $97 a barrel on Thursday as plentiful supply and a strong US dollar outweighed concerns about potential loss of supply as a result of conflict in the Middle East.
The dollar hit a four-year high, dampening demand for commodities priced in the US currency at a time when global economic growth is already lacklustre, particularly in the eurozone and China.
Brent shed 19 cents to $96.76 a barrel by 1130 GMT. It hit its lowest since July 2012 at $95.60 on Wednesday. US crude was down 9 cents at $92.71 a barrel.
“I’m not convinced the pressure on crude oil is over,” said Olivier Jakob, managing director at Petromatrix. “Unless you have a supply cut, it’s going to be difficult to have a strong rebound.”
Fighting across the Middle East and North Africa continued to dominate headlines, raising the prospect of possible disruption to oil production in several OPEC countries.
A war plane attacked the Libyan port of Benghazi on Wednesday but overall national production has risen.
Libya’s oil output has climbed to 900,000 barrels per day (bpd), with the major El Sharara oilfield at 200,000 bpd, an official with the National Oil Corporation said. Its production stood at 800,000 bpd earlier in the week.
US-led air strikes have targeted Islamic State-controlled oil refineries in eastern Syria in a move to choke off a source of revenue for the militant group, US officials said.
Last week Abdullah al-Badri, secretary-general of the Organization of the Petroleum Exporting Countries, said he expected the group to lower its output target.
But on Tuesday, United Arab Emirates oil minister Suhail bin Mohammed al-Mazroui said it was premature to decide before OPEC meets in November.
OPEC’s top oil producer and the world’s largest oil exporter, Saudi Arabia, pumped 9.597 million bpd in August.
Although that was down by 408,000 bpd from around 10 million bpd in July, the amount of crude supplied to the market inched up to 9.688 million bpd in August, an industry source said.
US crude stockpiles fell unexpectedly last week as imports dropped to their lowest level in four months, data from the Energy Information Administration showed on Wednesday.
Crude inventories dropped 4.3 million barrels in the week ending Sept. 19, defying analysts’ expectations of an increase of 386,000 barrels.