Oil Drops On Rise In U.S. Gasoline Supplies, Strong Dollar And Contract Expiration

By Myra P. Saefong Markets MarketWatch Pulse

Oil prices dropped Wednesday, with prices settling at a two-and-a-half week low. An unexpected weekly climb in U.S. gasoline supplies had fueled earlier losses, which worsened amid volatile trading tied to Thursday's expiration of the May West Texas Intermediate crude contract. WTI prices dropped below $51 after the release of the Federal Reserve’s Beige Book. There was "generally nothing in the Beige Book that would stop the Fed from raising rates in June, so the dollar rallied and added to oil's expiration lows," said Phil Flynn, senior market analyst at Price Futures Group. May WTI crude lost $1.97, or 3.8%, to settle at $50.44 a barrel.

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