Global oil prices fell sharply Monday as investors dumped crude following the strongest third quarter in a decade amid a surge in the dollar and a rise in U.S. Gulf region drillers.
Brent crude futures for December delivery, the global benchmark, were seen 1.8% lower from their Friday close in New York -- and down nearly $4 a barrel from the multi-month high they reached last week -- by midday in London and changing hands at $55.81 each. West Texas Intermediate crude futures for November delivery were marked 2% lower at $50.63 each.
Late last week, oilfield services company Baker Hughes (BHI) said U.S. producers added rigs in the Gulf for the first time in seven weeks, taking its well-watch count of installations to 750 for the week ending on September 29 - a figure that dwarfs the 425 tally recorded over the same week a year ago.
Prices were also pressured by data from Iraq's Oil Ministry, which showed September crude exports rising to an average of 3.24 million barrels per day, which it sold at an average price of $50.23 per barrel.
The recent surge in the dollar is providing further downward momentum to crude prices as investors move cash to higher yielding assets such as Treasury and corporate bonds. The dollar index, which measures the greenback's strength against a basket of six global currencies, was marked 0.5% higher at 93.55, the highest since mid-August, in the late European morning session, while benchmark 10-year Treasury yields, meanwhile, rose 2 basis points to 2.35%, the highest in 10 weeks.
Investors have been retracing cash into the dollar since early September, but the gains have accelerated in the wake of President Donald Trump's tax proposals last week and news that former Fed Governor Kevin Warsh could be chosen to replace chairwoman Janet Yellen when her term expires early next year.
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