Friday, 23 December 2016

Crude oil prices move sharply lower in pre-xmas trade.

U.S. oil moved sharply lower on Friday, as a strong U.S. dollar continued to weigh, as well as a rise in Libyan production.
Trading volumes were expected to be thin this week as trader were beginning to unwind positions
ahead of the Christmas holiday.

U.S. crude futures for January delivery were down 1.11% at $52.36 a barrel.
On the ICE Futures Exchange in London, the February Brent contract tumbled 1.29% to trade at $54.35 a barrel.

The dollar was boosted after U.S. Commerce Department said on Thursday that gross domestic product grew at an annual rate of 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%.

The greenback has been broadly supported since the Federal Reserve concluded its policy meeting last week by raising interest rates by 25 basis points and projected three more rate hikes for 2017.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 102.99, just off Tuesday’s fresh 14-year highs of 103.62.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Separately, Libya's National Oil Corp said it hopes to add 270,000 bpd to national production over the next three months after announcing on Tuesday the reopening of pipelines leading from two major fields, Sharara and El Feel.

Meanwhile, oil traders awaited further clarity on whether major crude producers will stick to their promise to pull back on output.
OPEC members agreed to reduce output by a combined 1.2 million barrels per day starting from January 1, their first such deal since 2008.


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