Oil prices tumbled below $54 a barrel today amid a resilient dollar and expectations of swelling crude oil stockpiles in the United States.
US light crude fell 55 cents to $53.50 a barrel, taking two-day losses to more than $1. Prices are more than $4 below their all-time peak from March 17th but still up 24 per cent since the start of the year.
London's Brent crude fell $1.43 to $52.50 a barrel, catching up with US losses after a longer Easter break.
The dollar struck a five-month high versus the yen early today, its ninth straight gain, and hovered near its six-week peak against the euro, with some speculative players liquidating oil profits to catch the rising trend.
Expectations the United States would raise interest rates more aggressively has boosted the embattled dollar, gains that could test oil demand in countries that have been partly spared high fuel prices thanks to strong local currencies.
Oil traders are on alert for any refinery hiccups that could disrupt supplies ahead of the summer, when Americans go driving for the holidays, causing demand to increase.
Commercial inventories of the motor fuel are 7.5 per cent higher than a year ago, but were forecast to have fallen 1.5 million barrels in the week ended March 25th, the fourth draw in a row, a Reuters forecast by eight analysts showed.