Rigging equipment is pictured in a field outside of Sweetwater, Texas June 4, 2015. Reuters/Cooper Neill
Oil dipped on Monday as traders remained cautious ahead of an OPEC meeting later this week and as a widely expected U.S. interest rate hike strengthened the dollar.
Oil prices are heading for declines of as much as 10 percent this month, with a supply glut showing no signs of easing and a firmer U.S. dollar making greenback-denominated contracts more expensive for holders of other currencies.
The dollar edged up to a fresh 8-1/2-month high against a basket of major currencies on Monday. [USD/]
Benchmark Brent for January was down 25 cents, or about half a percent, at $44.61 a barrel at 0728 GMT. U.S. crude dropped 10 cents to $41.61.
While most analysts do not expect OPEC to cut production at an important policy meeting on Dec.4, they are mindful that Saudi Arabia could be inching towards the idea of working on price support measures with other oil producers.
OPEC and Russia could make “some sort of co-ordinated attempt to reduce production”, said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.
“The glut continues, but I do feel that it could be reversed quite quickly given the change in interest rates in the United States, which would indicate more demand.”
But OPEC officials have called into question an upbeat forecast from the group’s researchers, with some sceptical there will be a quick easing of the supply glut in&helli