Oil prices drop as data reveals rise in U.S. stockpiles

Thus, in the short term, we could crude oil prices fall further. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.24% on Friday. Osborne said the rate will remain static throughout 2016 and increase only by 0.1 percent in 2017.

“Commodities have bounced back with oil trading higher with rising geopolitical tensions in the Middle East”, said CMC Markets analyst Jasper Lawler.

Oil prices soared on Tuesday after Turkey shot down a Russian warplane in Syria for alleged airspace violation. While the booming US output has tailed off this year, oil stockpiles remain near record highs.

“With the dollar stronger and the inventory numbers bearish on whole, we suspect rallies if any will be rather short-lived”, Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in NY, said.

Production volume at OPEC member states is at an all-time high of more than 31 million barrels a day, and Russian Federation, which is not an OPEC member, is also boosting output.

“From a fundamental point of view, an increase in OPEC’s production quota is much required; Indonesia’s inclusion into the cartel will add roughly 800,000 barrels a day into the overall production pipeline will give OPEC the ideal excuse to propose a higher quota”, said Gan.

“An agreement to cut the production target will definitely be a booster for oil prices”, Bernard Aw, market strategist at IG Markets in Singapore, told AFP. A preliminary inventory report by industry group American Petroleum Institute had anticipated a 2.6-million barrel rise while a Reuters poll of analysts forecast a 1.2 million build.

On Wednesday, Nymex futures rose 17 cents, or 0.4%, after data showed that oil supplies in the USA rose less than expected last week. They rose 10.35 cents, or 8%, for the week, its largest one-week gain since April and largest one-week percentage gain since September 2012.

Gold futures for February delivery declined 1.3 percent to settle at US$1,056.20 an ounce at 12:45pm on the Comex in NY. Based on data for the selected major metropolitan areas surveyed in EIA’s Gasoline and Diesel Fuel Update, retail gasoline prices as of November 23 range from a low of $1.83/g in Houston, Texas, to $2.79/g in Los Angeles, California.

Tim Puko and Jenny W. Hsu contributed to this article.