London: Brent crude oil dropped below $83 a barrel when the dollar hit a four-year high on Friday.
The dollar touched its highest level since June 2010 against significant currencies and raised their costs. The demand for dollar-denominated commodities such as oil has decreased.
Brent was down 30 cents at $82.56 a barrel by 0930 GMT. The benchmark hit a four-year intra-day low of $81.63 on Wednesday, down from a high above $115 in June.
US crude was unchanged at $77.91 a barrel, having dropped from a high above $107 five months ago.
Investors awaited US non-farm payrolls data due at 8:30 a.m. EST (1330 GMT) on Friday, which were expected to show employment in the world’s biggest oil consumer increased again in October.
“Non-farm payrolls could push the dollar even higher and add to the bearish picture for oil,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.
“Oil supply risks have eased with fewer worries about the loss of production and more focus on poor demand.”
Growing supplies of high quality crude oil from North American shale formations have weighed heavily on prices this year, creating a glut in world markets and decreasing demand for oil from the Organization of the Petroleum Exporting Countries.
OPEC forecast on Thursday that its market share would be 5 per cent smaller by 2018 as shale supplies continued to increase faster than demand.
But OPEC Secretary-General Abdullah al-Badri said the 12-member cartel, which pumps a third of the world’s oil, was not panicking and thought prices would recover next year.
“I think the price will rebound by the second half of next year. But I don’t know by how much. This situation of low prices cannot continue,” Badri said after announcing the publication the group’s 2014 World Oil Outlook.
OPEC ministers will meet in Vienna on November 27 to discuss how to react to falling oil prices and could decide to trim production.
But many analysts think the scale of the oversupply facing global oil markets is so great that OPEC is unlikely to be able to reduce output sufficiently to prop up prices.
Oil analysts at French bank Societe Generale say a deal on a cut is possible but assign it less than a 50 percent chance:
“We have a 30-40 per cent probability that there will be a cut (in output) of some kind,” said Mark Keenan, head of commodities research at Societe Generale in Singapore.
Libya hopes to reopen the southern El Sharara oilfield “very soon” after it resolves a conflict between local tribes following an attack by gunmen that shut the field on Wednesday, an oil official said on Thursday.
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