TH: Oil price falls as dollar rises and stockpiles swell
Oil prices fell this morning amid fears there is still too much supply in the world market combined with the dampening effect of a strong US dollar.
Brent crude was down 37 cents on its previous closing price, at $48. US-based West Texas Intermediate (WTI), meanwhile, had fallen by 21 cents to $46.14.
Despite today's slump, prices have made their highest monthly gains since April, up around 20 per cent since the beginning of August, says Reuters.
The commodity has slumped drastically over the past two years because of a global oversupply, falling below $30 a barrel in February. A steady rally since then is sticking at the $50 mark. In June 2014, oil was at $112 per barrel.
Today's fall is driven by a strong US dollar, says Reuters. Oil is traded in dollars and is a more tempting offer for investors outside the US when the dollar is weaker and they can therefore get more for their money. As the dollar rises, oil usually falls.
According to MarketWatch, this morning's slump can also be attributed to fears the US Energy Information Administration will announce today that stockpiles of crude oil increased in the US last week.
