Brent falls below $92 on strong dollar, surplus supply
Brent crude futures fell but held above $92 a barrel on Monday, extending this year’s rout that saw the international benchmark hit a 27-month low in the previous session due to a strong US dollar and ample oil supply.
Brent lost nearly 5 per cent last week, its steepest decline since April 2013. The crude finished lower for its fourth week in five after the dollar touched a four-year high on Friday.
“My feeling is the fall in Brent has gone far enough – $90 is the break-even point for Saudi Arabia to maintain current levels of public spending,” said Tony Nunan, oil risk manager at Tokyo’s Mitsubishi Corp.
The last time Brent dropped below $90 was in June 2012, and Nunan said that support level could be breached today, if the dollar sustains its gains.
“There will be no support for Brent until it reaches $90 a barrel,” said Ken Hasegawa, commodity sales manager at Tokyo’s Newedge Japan, adding that it might hit that level today.
A cut in output by the Organization of the Petroleum Exporting Countries (OPEC) could support oil prices, but the group is not due to meet until Nov. 27 and there have been no signals that it will take action before then.
“Despite all the geopolitical risks in the market there is still a surplus of crude. That’s been the case in the last six months, but we are now entering the higher demand winter season,” Nunan said.
Source: ET- Brent falls below $92 on strong dollar, surplus supply
