Oil prices extended losses in Asia today on the back of a strong dollar while reported comments by Iran’s oil minister that his country planned to boost output ramped up oversupply worries.
The comments by Bijan Zangeneh, carried by Iran’s official news agency on Tuesday, added to a feeling that an informal OPEC meeting with Russia in September may not result in a deal that would boost prices.
Zangeneh said Iran needed to raise its output to regain the market share lost while it was under international sanctions, which were lifted only in January.
Iran has struggled to raise production above four million barrels per day since the the sanctions were removed, according to the report, which said it is currently producing 3.8 million.
At around 0415 GMT, US benchmark West Texas Intermediate was down one cent at USD 46.34 and Brent eased six cents to USD 48.31.
“A generally strengthening dollar added to oils woes,” said Jeffrey Halley, senior market analyst at OANDA.
“Combined with increasing scepticism regarding OPEC’s ability to bring in meaningful production cuts, the soft tone in oil should continue through the Asia session today,” he told AFP.
The dollar bought 103 yen in Tokyo today, up from the previous day’s 102.42 yen and much stronger than the levels below 100 yen touched last week.
A stronger greenback makes crude more expensive for holders of weaker currencies, denting demand.
The greenback has been gaining rallying since Federal Reserve boss Janet Yellen on Friday signalled a possible hike in US interest rates this year.
Traders are now awaiting the release this coming Friday of US jobs figures, which will give a fresh handle on the US economy and could guide the Fed’s decision on when to hike rates.