OIL RESUMES DECLINE IN ASIA

Brent oil dropped in Asia as the dollar strengthened, giving up some of the gains posted at the end of the worst week since October 2020, Ben Sharples reported for Bloomberg News.

Futures in London slipped 1.2% on Monday as a rising dollar reduced the appeal of commodities priced in the currency. Despite rising 2% on Friday, crude still capped a large weekly loss amid a combination of factors including a softening physical market and the unwinding of long positions.

Concerns about near-term demand due to the uneven pandemic recovery also continue to linger. Iran’s Supreme Leader Ayatollah Ali Khamenei, meanwhile, said his country was in no hurry to revive the nuclear deal, although he reiterated that Tehran was still prepared to return to the original terms of the agreement once the U.S. has lifted sanctions.

Despite the penalties, Iranian crude exports appear to be rising, with China boosting its purchases recently.

Saudi Arabia, meanwhile, saw another assault on its energy facilities. While the offensive by Iran-backed Houthi rebels on an Aramco refinery on Friday had no impact on oil supplies, it’s the latest in a series of attacks on the kingdom.

Despite the weekly plunge, there’s confidence in the long-term outlook and a return to higher prices. Goldman Sachs Group Inc. said the recent sell-off was transient and that the rebalancing would continue with vaccinations driving higher mobility.

The market will be keenly watching the OPEC+ meeting next week for any change to its output policy in May, especially after the slide in oil and comments from the International Energy Agency that supply is plentiful.

Brent for May settlement fell 75 cents to $63.78 a barrel on the ICE Futures Europe exchange at 8:12 a.m. Singapore time after slumping 6.8% last week.

West Texas Intermediate for April delivery, which expires Monday, lost 1.2% to $60.70 on the New York Mercantile Exchange after adding 2.4% in the previous session. The more-active May contract slid 1% to $60.80.

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