Oil prices have witnessed a more than two dollar fall as the dollar gets stronger and US crude stockpiles rise. New York's main oil futures contract, light sweet crude for delivery in June settled at US$116 a barrel. In London, Brent North Sea crude for June delivery settled at US$114 a barrel.
US crude reserves rose 2.4 mln barrels last week, beating market expectations for a 1.5 mln barrel gain. A stronger dollar makes dollar-priced crude more expensive for foreign buyers, discouraging demand. The dollar has recorded gains in value against the euro amid speculation that the US Federal Reserve might end its campaign of cutting interest rates and following a disappointing report on German business confidence. The Euro is trading below US$1.57.
However, prices were supported by ongoing supply worries. Discussions collapsed between officials from Unite and Ineos, which owns the Grangemouth refinery between Glasgow and Edinburgh, indicating that 1,200 workers at the site will go on strike Sunday and Monday. Ineos has begun gradually shutting down Grangemouth, the biggest refinery in Scotland, producing 210,000 bpd, and has warned of fuel shortages later this week if the strike goes ahead.
Production problems persist in Nigeria, which is the largest crude producer in Africa.