Global oil prices declined sharply into a second day on Wednesday as the dollar gained just as industry data showed an increase in U.S. crude and gasoline stockpiles, with surging production in the country hampering attempts by the Organization of Petroleum Exporting Countries, OPEC, to end a global glut.
U.S. West Texas Intermediate crude was down 37 cents, or 0.6 percent, at $62.64, after falling 90 cents the previous session.
Brent crude was down 40 cents, or 0.6 percent, at $66.23 a barrel. On Tuesday, the contract fell 87 cents to close at $66.63 a barrel.
“There is ongoing pressure, largely coming from a stronger U.S. dollar,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
The dollar rose 0.1 percent to against the Japanese yen to 107.43 yen. A stronger greenback makes oil more expensive for other currency holders as crude is usually priced in dollars.
U.S. crude stockpiles climbed last week as imports increased, while gasoline inventories climbed and distillate stocks were drawn down, industry group the American Petroleum Institute said on Tuesday.
Crude inventories rose by 933,000 barrels in the week to 421.2 million, compared with analyst expectations for an increase of 2.1 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.3 million barrels, the API said. Refinery crude runs dropped by 209,000 barrels per day, API data showed.
Official data from the U.S. Energy Information Administration (EIA) is due out later today.
Soaring U.S. production has pressured oil futures at a time when members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia have reduced output in an attempt to support prices.
“Production numbers and rig counts are just as important at this stage, particularly with U.S. production breaking through the 10 million barrel per day level,” said McCarthy.
“Further increases there and further rigs coming on, where we have seen an acceleration in recent weeks, could also add to pressure on the oil complex,” he said.
The United States will overtake Russia as the world’s biggest oil producer by 2019, International Energy Agency Executive Director Fatih Birol said on Tuesday.