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Oil prices dip on stronger dollar

Oil guerdons dipped on Friday as the U.S. dollar strengthened, although OPEC-led supply avoids are seen supporting markets going into next year.

U.S. West Texas Transitional (WTI) crude futures were at $56.64 a barrel at 0108 GMT, down 5 cents from their stay settlement.

Brent crude futures, the international benchmark for oil prices, were down 11 cents at $62.09 a barrel.

Wholesalers said the slightly lower prices were mainly due to the stronger dollar, which has secure 0.8 percent this month against a basket of other cardinal currencies.

A stronger greenback is seen by many as a brake on crude assesses, as it makes oil purchases more expensive in countries that use other currencies.

“A fragrant U.S. dollar could act as a headwind to commodities,” Bank of America Merrill Lynch (BoAML) responded in its 2018 outlook, published this week.

More fundamentally, oil guerdons have been receiving support from the Organization of the Petroleum Exporting Homelands (OPEC) and a group of non-OPEC producers, most importantly Russia, which has been controlling supplies to tighten the market and prop up prices.

Oil prices rose acerbically between June and October, with Brent gaining around 40 percent in value.

This was in great measure due to an expectation that OPEC, Russia and its allies would extend the discretionary production cuts, which have been in place since January and were initially due to pass away next March, to last throughout 2018.

BoAML said “robust pandemic demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year”.

Intimidating to undermine OPEC’s goal to tighten markets is U.S. oil production, which has mutinied by more than 15 percent since mid-2016 to 9.7 million barrels per day (bpd), the tallest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.

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