Oil prices slipped in early Asian trade on Monday on a strong dollar as the odds grow of a June or July rate hike, and signs that global oil supply is holding up even as unplanned outages rise to at least a five-year high.
U.S. crude futures fell 16 cents to $48.25 a barrel as of 2347 GMT after settling down 41 cents in the previous session.
Brent futures were down 7 cents at $48.65 a barrel after ending the previous session 9 cents down.
The dollar index was marginally lower in early trade on Monday after gaining for a third straight week last week.
A strong dollar makes greenback-denominated commodities including oil more expensive for holders of other currencies.
“Market odds of a June rate hike ended the week at around 30 percent, up from 4 percent a week ago. That is a significant repricing,” analysts at banking group ANZ said in a market report on Monday. “We continue to see June as very much a ‘live’ meeting.”
U.S. crude rose 3.3 percent last week, while Brent was up 1.7 percent week, as unplanned supply outages rose to the highest since at least 2011 due to wildfires in Canada and losses in Nigeria, Libya and Venezuela.
But global oil supply still outstripped demand by around 1.5 million barrels per day, Russian Energy Minister Alexander Novak said on Friday.
Iran plans to increase oil export capacity to 2.2 million barrels by the summer and has no plans to freeze its level of oil production and exports, Deputy Oil Minister Rokneddin Javadi was quoted on Sunday as saying.
Tehran is trying to raise its crude exports to pre-sanctions levels.
A meeting of the OPEC exporters’ group, including Iran, is scheduled for June 2.