Oil Prices Fall on Stronger Dollar

By Nicole Friedman 

        NEW YORK--Oil prices fell Monday as the U.S. dollar gained against major currencies, putting pressure on a range of commodities.
        Light, sweet crude for August delivery recently fell 47 cents, or 0.9%, to $50.42 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 46 cents, or 0.8%, to $56.64 a barrel on ICE Futures Europe.
        Oil prices have slid in recent weeks from their 2015 highs on concerns about growing global oil production, despite a continuing oversupply of crude. The recent Iranian nuclear deal added to concerns that more crude oil could be produced in the coming months.
        The oil market has also been sensitive to currency moves this year. A stronger dollar makes oil, which is priced in dollars, more expensive for foreign buyers. The WSJ Dollar Index recently traded up 0.2%.
        Other commodities, including gold and copper, also fell Monday.
        Oil consumption has risen this year, supporting oil prices, but many analysts say that demand is insufficient to eat away at the global glut of crude and that a drop in production is also needed.
        "The surprising strength in demand, together with opportunistic stock-building, absorbed more of the global crude oil surplus than we had expected" in the first half of the year, Bank of America Merrill Lynch said in a note.
        Even so, "the physical market balance is weakening rapidly at the moment, " the bank said. "Oil demand may have to work hard to absorb the ongoing surplus."
        Most of the demand growth has been for gasoline.
        Gasoline futures recently traded up 0.1% at $1.9307 a gallon, while diesel futures fell 0.9% to $1.6488 a gallon. Diesel futures are trading near their lowest intraday prices since January.
        Write to Nicole Friedman at nicole.friedman@wsj.com
        (END) Dow Jones Newswires

        July 20, 2015 10:10 ET (14:10 GMT)

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