Oil prices fell on Monday as rising production in the Middle East outweighed a decline in the U.S. output and a sliding dollar, while Morgan Stanley warned that an emerging gasoline glut could also spill back into crude markets. Brent was trading at $46.90 per barrel at 0643 GMT, down 47 cents, or 1 percent, from its last settlement. U.S. crude was down 33 cents at $45.59 a barrel. OPEC supplies rose to 32.64 million barrels per day (bpd) in April, from 32.47 million bpd in March, according to a Reuters survey. That almost matches January's 32.65 million bpd, when Indonesia's return to OPEC boosted production to the highest, since at least 1997.
Hawkish comments from Fed Chair Janet Yellen shaped price action yesterday. The central bank chief warned against waiting too long to raise rates, sending the US Dollar higher alongside Treasury bond yields and steepening the 2017 tightening path implied in Fed Funds futures. Gold prices suffered amid ebbing demand for non-interest-bearing and anti-fiat assets while the USD-denominated WTI crude oil price benchmark succumbed to de-facto selling pressure.
The case for steeper rate hikes may find further support on the data front. January’s CPI report is expected to put the headline on-year US inflation rate at 2.4 percent, the highest since March 2012. Price growth readings have tended to outperform relative to consensus forecasts since mid-2016, opening the door for an even steeper uptick.
Elsewhere on the data docket, EIA inventory data is expected to show crude oil stockpiles added 3.5 million barrels last week. A private-sector estimate from API predicted a far more sizable gain of 9.9 million barrels over the same period yesterday. A print closer in line with that assessment may amplify USD-derived pressure as traders increasingly fret about swelling swing supply countering support from OPEC output cuts.
more at: http://finance.yahoo.com/news/crude-oil-prices-risk-us-072400103.html