Crude oil falls 2pc from 18-month high
SINGAPORE, January 4, 2017
Oil prices dropped more than 2 per cent on Wednesday from the 18-month highs hit on Tuesday as the US dollar strengthened.
Brent futures fell $1.35, or 2.4 percent, to settle at $55.47 a barrel, while US West Texas Intermediate (WTI) crude lost $1.39, or 2.6 percent, to settle at $52.33, its lowest close in two weeks, said a Reuters report.
Before the slide began, both contracts hit their highest levels since July 2015 on hopes that a deal between Opec and other big oil exporters to cut production, which kicked in on Sunday, will drain a global supply glut. Brent reached as high as $58.37 and WTI $55.24.
The dollar hit a 14-year high against a basket of currencies after data showed U.S. manufacturing activity grew more than expected in November.
The dollar index, which measures the greenback against a basket of currencies, was at 103.35 after climbing to 103.82 the previous day, its strongest since December 2002.
Meanwhile, reports suggested that Opec member states have begun to reduce production. Kuwait had cut output by 130,000 barrels a day to about 2.75 million a day.