Gerard Izuora
Oil prices crashed further on Wednesday, weighed down as the US dollar moved further away from three-year lows hit last week.
US West Texas Intermediate (WTI) crude futures were at $61.37 a barrel down 42 cents, or 0.7 per cent, from their last settlement, while Brent crude futures had dropped 36 cents, or 0.6 per cent, from their last close to $64.89 per barrel.
Wang Tao, Reuters technical commodity analyst, said Brent could fall into a range of $63.92-$64.41 per barrel, as suggested by its wave pattern and a projection analysis.
Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies at home.
The dollar steadied against a basket of currencies on Wednesday, having pulled up from three-year lows set last week as traders shaved off some of the bearish bets against the US currency.
“The US dollar continues to find firmer footing,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
Overall, however, oil markets remain well supported due to healthy demand-growth and supply restraint by the Organization of the Petroleum Exporting Countries (OPEC), which started last year to draw down excess global inventories.