Oil prices fell further in Asia Thursday on a stronger greenback and expectations that the OPEC cartel is unlikely to cut production levels to counter a global supply glut, analysts said.
US benchmark West Texas Intermediate (WTI) for December delivery fell 15 cents to $77.03 while Brent crude was down 37 cents at $80.01 in late-morning trade.
WTI fell 76 cents in New York Wednesday to close at a three-year low, while Brent dived $1.29 and is sitting at levels last seen in 2010.
“The appreciation of the US dollar against major currencies and an increase in supply from US tight oil are applying pressure on benchmark prices,” said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy EY.
The US dollar bought 115.74 yen in Asian trade Thursday, compared with 115.52 yen in New York on Wednesday.
A stronger greenback makes dollar-priced oil expensive for buyers using weaker currencies, denting demand and pushing prices lower.
Dealers remain pessimistic over the possibility of the 12-nation Organization of the Petroleum Exporting Countries (OPEC) reducing output to stem a global glut, in part caused by a flood of US “tight oil” extracted from shale.
OPEC’s next meeting is set for November 27 in Vienna.
On Wednesday, Saudi Arabia’s oil minister rejected talk that the country was leading a price war in global crude markets as prices tumble.
“Talk of a price war is a sign of misunderstanding — deliberate or otherwise — and has no basis in reality,” Ali Al-Naimi told a conference in Acapulco, according to the text of his speech.
Last week Riyadh sent global oil prices plunging when it cut its prices for the US market while raising them for Asia, the country’s major outlet.
Analysts guessed that the country wanted to strengthen its market share in the United States against a flood of domestic oil from shale deposits.