SINGAPORE: Oil prices fell in Asia on Friday as ongoing worries about the global supply glut overshadowed the benefits of a weakening dollar.
Official data released Wednesday showing US commercial crude inventories climbing to a fresh record high last week further underscored concerns about a market brimming with supplies and not enough demand.
At around 0345 GMT, US benchmark West Texas Intermediate for delivery in May fell 29 cents to $38.05 while Brent crude for June, a new contract, was down 34 cents at $39.99.
Shailaja Nair, senior managing editor at global energy information provider Platts, said “unchanged fundamentals” of supply and demand remain a key influence on market sentiment.
“The market is still oversupplied with crude, demand is still the same, we re not seeing any rise in demand. Nor is there any possibility of any rise in demand in the near term,” she told AFP.
Major oil producers led by Russia and Saudi Arabia will meet on April 17 in Doha to discuss measures to stabilise prices, including a proposal to freeze output.
But Nair said only a decision to cut production rather than an output freeze will boost prices.
“Considering the amount of crude already in the market, a freeze is not going to make much of a difference,” she said.
Adding to downward pressure on the commodity is the return of Iranian crude to world markets after years of economic sanctions on Tehran were lifted following a nuclear deal last year.
A slip in the dollar was unable to provide any lift. The greenback tumbled this week after Federal Reserve chief Janet Yellen trod a cautious line about the outlook for the global economy and said US interest rates were unlikely to rise before June.
A weaker greenback typically bolsters the appeal of the dollar-priced commodity for buyers using stronger currencies.