ENERGY

Oil drops below $61 on supply glut, strong dollar

Brent for February delivery dropped $1.02 to $60.67 by 0959 GMT after settling up $1.58 on Tuesday. (Shutterstock)

Brent oil fell below $61 per barrel on Wednesday, weighed down by strong supply in the United States and a rising dollar.

Brent for February delivery dropped $1.02 to $60.67 by 0959 GMT after settling up $1.58 on Tuesday.

U.S. crude fell 95 cents to $56.17 a barrel, after closing $1.86 higher in the previous session.

Data from the American Petroleum Institute (API), an industry group, showed U.S. crude stocks rose by 5.4 million barrels in the week ended Dec. 19. Analysts had expected a drop of 2.3 million barrels.

A supply glut in the United States and elsewhere has helped push oil down some 46 percent since it reached this year's peak above $115 per barrel in June.

"There was a large build in the API data and there are high stocks for now, although strong U.S. GDP growth should help demand," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.

The dollar index stayed close to its highest since April 2006 after a revised third-quarter U.S. gross domestic product report blew past expectations to register the fastest growth in 11 years.

A strong dollar makes commodities priced in the greenback more expensive for holders of other currencies.

Investors now await official U.S. oil inventory data to be released by the U.S. government's Energy Information Administration later on Wednesday.

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Last Update: Wednesday, 24 December 2014 KSA 14:31 - GMT 11:31
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Oil drops below $61 on supply glut, strong dollar
Brent oil fell below $61 per barrel on Wednesday, weighed down by strong supply in the United States and a rising dollar
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