Oil Prices Slide on Crude Glut

Oil prices dipped on Thursday as a large crude glut and a sliding dollar overshadowed strong global fuel demand.  Front-month Brent futures LCOc1 were down 16 cents at $63.64 per barrel by 0300 GMT. U.S. crude futures CLc1 dropped 12 cents to $59.52.

Crude markets remain oversupplied ahead of Friday’s meeting of the Organization of the Petroleum Exporting Countries, which is expected to continue to produce about 2 million barrels per day above demand, adding to a glut that has left millions of barrels stored on tankers without a buyer.  Energy advisory Wood Mackenzie said that it was very unlikely that OPEC would agree to cut output at its June 5 meeting and that it expected the group’s crude output to remain just above its 30 million bpd production ceiling through 2016.

The company said it forecast Brent to average $60 a barrel in 2015 and $70 in 2016.  But strong global fuel demand curbed declines in prices.  Goldman Sachs said that Europe’s high diesel consumption was a risk to the bank’s bearish Brent outlook of $58 per barrel for 2015 and $62 for next year.