Oil prices fell Monday as the U.S. dollar rose and the energy market’s focus shifted back to the global oversupply of crude.
Light, sweet crude for July, the U.S. benchmark, was down 82 cents, or 1.4%, at $59.14 a barrel on the New York Mercantile Exchange. The global Brent crude contract for July was down $1, or 1.6%, at $63.64 a barrel on the ICE Futures Europe exchange.
“The fact remains that supply is continuing to outstrip demand,” analyst Dominick Chirichella of the Energy Management Institute said in a note. “It is very difficult to see how the massive oversupply situation is going to reverse in the short to medium term.”
Globally, analysts said Saudi Arabia was talking of increasing production and Libya could also soon raise output, while Iraq is pumping at near-record levels, contributing to swelling supplies. Talks to resolve a diplomatic stalemate with Iran were continuing, leading up to a June 30 deadline, with the potential to eventually release at least another 500,000 barrels a day onto world markets. Analysts say global supplies continue to mount at a rate of around 2 million barrels a day.