Oil prices fell to a three-month low near $48 a barrel today after being pushed down by high crude inventories in the United States, slower global demand growth and a rising US dollar.
US crude oil prices were down 13 cents to $48.41 a barrel by 7.15am, after hitting a low of $48.29, extending losses of almost $2 yesterday.
Oil prices are down around 17 per cent from the record-high of $58.28 hit on April 4th. Brent crude prices shed 33 cents to $48.01 a barrel, after losing $1.61 on Thursday.
"Opec had allowed oil prices to stay high on a falling US dollar to keep their purchasing power constant. But now with the dollar strengthening, they would be content to let prices ease for the time being," said David Thurtell, commodity strategist with Commonwealth Bank of Australia.
Qatari Energy Minister Abdullah al-Attiyah said on Thursday it was too early for Opec to decide to curb production, despite the drop in prices. The cartel is scheduled to meet on June 15th to plan its production for the second half of 2005.
The latest round of price falls was driven more by the strong dollar than high US inventories, which rose to a six-year high of 329.7 million barrels for the week ended May 6th.