Oil prices edged down Monday, depressed by a strong dollar and concerns that reduced global appetite for crude might frustrate efforts by major producers to cut supply.
Brent crude, the global oil benchmark, fell 0.46% to $51.87 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were down 0.43% at $48.61 a barrel.
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The appreciating U.S. dollar helped push down crude futures. The Wall Street Journal Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.23% to $86.17 Monday. As oil is priced in dollars, the commodity becomes more expensive for holders of other currencies as the greenback appreciates.
Last week, the International Energy Agency published revised figures for global crude demand. At the end of 2017, demand is now seen at 33 million barrels a day, compared with a previous estimate of 33.6 million barrels.
The new estimate is "only marginally above the current level of OPEC output," according to Commerzbank analysts.
"In other words, there will no longer be any significant supply deficit in the second half of the year, so there is hardly likely to be any further inventory reduction," they said in a note.
Since 2016, the Organization of the Petroleum Exporting Countries and a handful of nations outside the cartel have cut global oil supply by about 2% in an attempt to rebalance the market.
While global inventories have declined, stockpiles remain above the five-year average--the level to which OPEC wants to return and oil prices have moved little.
"Since the end of July we have basically gone sideways with small movements for brent crude, so we are pretty range bound," said Bjarne Schieldrop, chief commodities analyst at SEB Markets.
"These price moves are capped by inventory and reactive U.S. shale. We have also seen some disappointment with OPEC's compliance with the deal to cut supply."
Investors have grown concerned about a flood of crude coming from OPEC members Algeria, Iraq and the U.A.E.--all of which have fallen short of their pledge to rein in their output.
Moreover, Libya, which was exempt from the agreement to cut output, is ramping up production.
Another major drag on the market has been U.S. oil production, which has slowed but continues to rise.
In its latest weekly count, Baker Hughes Inc. said the number of active U.S. oil rigs climbed by three to 768 rigs.
Overall, the extra flow of crude is "casting doubt on rebalancing efforts," said analysts at JBC Energy, who forecast that oil prices will be back in the doldrums next year.
"We expect the total liquids balance to return to a more pronounced surplus over 2018, bringing with it a return to stock builds and a firm lid on prices," they said.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.64% to $1.60 a gallon. ICE gasoil changed hands at $481.50 a metric ton, down $1.00 from the previous settlement.
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(END) Dow Jones Newswires
August 14, 2017 07:24 ET (11:24 GMT)