Oil market falls back once again

Oil prices resumed their decline on Wednesday, with global crude oversupply still dampening investors' sentiment despite occasional rallies.

Prices had risen the previous day after a four-day losing streak, as traders weighed a price outlook from the International Energy Agency (IEA) and a lowered US estimate for crude production.

Oil prices have collapsed by more than half since mid-2014 with prices languishing under $50 a barrel, hurt by the supply glut and the decision by oil exporter grouping OPEC to maintain output to counter booming US shale production.

The Paris-based IEA, in a report Tuesday, forecast that oil prices would recover to $80 a barrel by 2020.

At around 1200 GMT Wednesday, US benchmark West Texas Intermediate for delivery in December was trading 52 cents lower at $43.69 a barrel.

Brent North Sea crude for December was down 21 cents at $47.23 a barrel.

A strong dollar, fuelled by widening expectations that the US Federal Reserve will raise interest rates next month, has also been keeping a lid on prices.

Oil is traded in dollars and a buoyant US currency would make the commodity more expensive for those holding weaker units, lowering demand and prices.

Caption: Representative Image

Photo: The Guardian