Oil Heads Lower as Supply Glut Continues

Oil prices fell for a sixth day on Wednesday, marking their longest string of losses in a year, as worsening global oversupply offset the potential lift from a weaker dollar and an expected drop in U.S. crude stocks.

A Reuters survey on Tuesday showed members of the Organization of the Petroleum Exporting Countries produced around 3 million barrels per day (bpd) of oil more than daily demand in the second quarter, compared with around 2 million bpd in the first three months of the year.

The Federal Reserve meets later in the day, but market expectations of a September rise in interest rates are fading, leaving the dollar down against a basket of currencies .DXY.

“If you look at (inventories) there’s been a pretty big build and also a build in gasoline (stockpiles) that is going to add a bit of pressure today,” said Olivier Jakob, an oil analyst at Petromatrix in Zug, Switzerland.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza