Oil on Monday declined by about 2 percent, the most since mid January, as a stronger dollar and signs of rising U.S. crude output pressured prices while an OPEC report showing high compliance with last year’s production-cut deal underwhelmed investors.
Brent futures were down $1.17, or 2.1 percent, at $55.53 a barrel by 12:34 p.m. EST (1734 GMT), while U.S. West Texas Intermediate crude fell 99 cents, or 1.8 percent, to $52.87 per barrel.
Those were the biggest percentage declines for both contracts since Jan. 18.
“A firmer U.S. dollar prompted some risk off trade flow across a range of commodities, with the petroleum futures attracting their share of the selling,” Tim Evans, Citi Futures’ energy futures specialist, said in a note.
Hopes of U.S. tax cuts to stoke corporate profits and investments lifted the dollar to a near three-week high against a basket of currencies, pressuring greenback-denominated oil.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed late last year to cut output by almost 1.8 million barrels per day (bpd) during the first half of 2017 to support prices and lessen a glut.
The group’s first monthly data since the deal showed that top producer Saudi Arabia made a large cut in its crude output in January, helping boost compliance with the group’s supply-reduction deal to a record high of 93 percent.
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