By Nicole Friedman and Cassie Werber
NEW YORK--Oil prices fell to the lowest point in over two weeks
Thursday, as the strength of the U.S. dollar weighed on prices and
global supplies remained ample.
Light, sweet crude for September delivery recently traded down
81 cents, or 0.8%, to $99.46 a barrel on the New York Mercantile
Exchange, up from a two-week intraday low of $99.09 a barrel. Brent
crude on ICE Futures Europe fell 23 cents, or 0.2%, to $106.28 a
barrel.
The dollar has strengthened among a basket of other currencies
due to unexpectedly strong U.S. economic indicators, including a
better-than-expected reading of gross domestic product for the
second quarter. A strong dollar weakens buying appetite because
crude is priced in dollars and becomes more expensive to the rest
of the world when the U.S. currency strengthens.
"The dollar continues to push higher. I think that that brings
more liquidation selling in crude," said Gene McGillian, broker and
analyst at Tradition Energy in Stamford, Conn.
And despite ongoing violence in various regions, including
Ukraine, Iraq and Libya, oil production has yet to be disrupted and
global supplies remain high.
"In spite of all of the evolving geopolitical issues, the market
is still viewing the overall global supply and demand balances as
amply supplied, with no shortages of oil anyplace in the world,"
said Dominick Chirichella, analyst at the Energy Management
Institute, in a note.
Speculative traders, including hedge funds, pension funds and
managed-money funds, took on record-high bets on rising U.S. and
global oil prices last month after an insurgency broke out in Iraq,
prompting fears of a large supply disruption. Now those traders may
be closing out their bets, pushing prices lower, Mr. McGillian
said.
"In our rush to nine-month highs [in June], the market brought
on a record amount of speculative length, and I think that's where
the selling pressure is coming from," he said.
Front-month August reformulated gasoline blendstock, or RBOB,
recently fell 0.98 cent, or 0.3%, to $2.8335 a gallon. The August
contract expires at settlement Thursday. The more-actively traded
September contract fell 1.07 cents, or 0.4%, to $2.8051 a
gallon.
August diesel fell 0.76 cent, or 0.3%, to $2.8830 a gallon.
September diesel slipped 0.63 cent, or 0.2%, to $2.8906 a
gallon.
Write to Nicole Friedman at nicole.friedman@wsj.com