World oil prices fell on Monday, reversing earlier gains and in line with other commodity markets, as traders took their cue from a stronger dollar, dealers said.
New York’s main contract, light sweet crude for January delivery, dipped 47 cents to 75.00 dollars a barrel.
Brent North Sea crude for January delivery eased 18 cents to 77.34 dollars per barrel.
“Commodity prices… are sliding again as dollar strengthened further this morning,” said Arifa Sheikh-Usmani, equity trader at Spreadex.
A strengthening greenback makes dollar-priced crude more expensive for buyers using other currencies. In turn, that tends to dampen oil demand and prices.
Before the weekend, crude futures had tumbled on Friday in volatile trading, succumbing to a strong dollar after news of a dramatic improvement in the troubled US labour market.
Official US data showed that job losses narrowed to 11,000 in November, a tenth fewer than in October, and the unemployment rate dipped to 10.0 percent.
That was the best official reading for job losses since December 2007 when the economy entered recession, raising hopes for a revival of US energy demand.
“A surprise drop in US unemployment supported the dollar as it led to expectations that the Fed might revise its policy stance sooner than expected,” said analysts at the John Hall Associates consultancy in a note to clients.
Oil prices had risen in earlier Asian trade on Monday, as the US dollar had weakened and amid indications from oil cartel OPEC that it was satisfied with current prices.
There were indications from the Organisation of Petroleum Exporting Countries (OPEC) that it was not going to cut production quotas at an upcoming meeting on December 22, analysts said.
“The chatter out of OPEC is that they are happy with the current pricing, there’s going to be no increase in production,” said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.
Saudi Arabia stated over the weekend that oil prices were “perfect” and the global market was stable as Arab heavyweights in the OPEC cartel appeared united in their support for maintaining production quotas.
“Everything is so good now, we don’t have to think very hard,” Saudi Oil Minister Ali al-Naimi said in Cairo, reflecting an agreement among OPEC members to keep production quotas unchanged at the conference.
(Zawya & AFP)