OIL prices fell yesterday, pulled down by a rising rig count in the United States, a strong U.S. dollar and record Organization of the Petroleum Exporting Countries (OPEC) output, which comes amid slowing global economic growth that could erode fuel demand.

    U.S. West Texas Intermediate (WTI) crude oil futures were trading at US$50.20 per barrel, down 15 U.S. cents from their last settlement.

    Traders said that WTI was pulled down by another rise in U.S. oil drilling activity.

    A report Friday by oil services provider Baker Hughes showed U.S. drillers added four rigs in the week to Oct. 14. It was the 16th week in a row that oil drillers had gone without making cuts, indicating more production to come.

    International benchmark Brent crude oil futures (LCOc1) were also down, dipping 8 cents from their last settlement to US$51.87 per barrel.

    Traders said that a seven-month high of the dollar against a basket of other leading currencies yesterday, which came on the back of an expected hike in U.S. interest rates later this year, was also weighing on crude prices.

    Since oil is traded in dollar, a stronger greenback makes it more expensive for countries using other currencies at home to purchase fuel, potentially undermining demand.

    Brent was also weighed by fresh production records from the OPEC, which pumped out a record 33.6 million barrels of crude oil per day in September.

    “Record supply from OPEC year to date, weaker global GDP estimates, and still elevated inventories cause us to lower and flatten our oil price outlook,” Bernstein Energy said.

    “We reduce our Brent forecast to US$60 per barrel in 2017 [US$70 per barrel before] and US$70 per barrel in 2018 [US$80 per barrel before],” it added.

    Despite yesterday’s falls, analysts said that traders were cautious about driving the market much further down, largely because of a plan by the OPEC to cut output in an initiative to rein in a global production overhang, which currently sees around half a million barrels of crude pumped every day in excess of demand.

    The OPEC is scheduled to meet Nov. 30 to discuss a production cut of around 1 million barrels per day. The producer cartel hopes non-OPEC members, particularly Russia, will join a potential cut. (SD-Agencies)