US oil dips below $50 on output cut comments made by Russian envoy and dollar rally
The price of US benchmark West Texas Intermediate (WTI) crude has fallen below the $50 mark this afternoon.
A dollar rally and indications that Russia will not implement an oil production cut alongside Opec next month pushed WTI down 1.2 per cent to $49.92, while Brent crude was down 1.5 per cent to $50.70.
WTI broke the $50 for the first time since June at the beginning of the month. Yesterday, prices shed more than one per cent after Iraq said it did not want to be part of an Opec deal to slash output.
An Interfax report today said the Russian envoy is against production cuts, just two days after Russia and Saudi Arabia agreed more should be done to stabilise the international oil market, Business Insider reported.
The dollar rose to its highest level in nearly nine months against multiple currencies today, making crude less affordable to many importers.
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"The dollar moving higher historically is obviously a negative factor," said Kyle Cooper, analyst at ION Energy in Houston.
The market was also unsteady ahead of weekly data from the American Petroleum Institute that may show a build in domestic crude stockpiles.
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Until this week, oil prices had risen around 13 per cent over the last three weeks since the Organisation of the Petroleum Exporting Countries (Opec) provisionally agreed to cut output for the first time in eight years.
Opec will firm up the deal to remove 700,000 barrels per day from global oil output when it meets in Vienna next month.
The consortium of many of the world's largest producers wants other producers to join in with a cut, though discussions remain ongoing.