Oil down as supply woes offset dollar, Brent-U.S. spread near week high

NEW YORK (Reuters) - Global oil prices fell on Thursday, with traders pricing the market lower before the expiry of the front-month contract in benchmark Brent (brent.167) and after estimates showing another big supply build at the delivery point for U.S. crude.

The reopening of the Houston Shipping Channel for oil imports and the potential nearing of a deal to end a U.S. refinery workers strike contributed to market bearishness, traders said.

"The ship channel opening allows crude to get to refineries and the expectation is that with margins strong, refiners will produce as much as they can and this is putting some pressure on oil futures," said Phil Flynn, analyst at Price Futures Group in Chicago.

"The strike news is mainly psychological in that it hadn't yet had a big impact on production, but a settlement would soothe concerns about the possibility the strike could eventually hurt output," Flynn said.

U.S. crude settled down $1.12, or 2.3 percent, at $47.05 a barrel, after a session low at $46.86.

Brent was down 45 cents, or about 1 percent, at $57.09, after falling more than $1 earlier.

Oil prices had earlier risen after the dollar's rally stalled on surprisingly weak U.S. February retail sales data. Dollar-denominated commodities, such as oil, become more appealing to holders of other currencies when the greenback depreciates. [FRX/]

U.S. crude fell after market data provider Genscape estimated a stock build of 2.2 million barrels since Friday in the Cushing, Oklahoma, delivery point for oil, traders said. The estimate came after U.S. government data showing Cushing stocks rose by 2.3 million barrels in the week to Friday. [EIA/S]

"The Cushing estimate shows more of the same old for U.S. crude - intense amounts of supply and shaky demand," said John Kilduff, partner at New York energy hedge fund Again Capital.

Brent slid as uncertainty crept into the market ahead of the Monday's expiry of its front-month contract, some traders said.

Brent's premium to U.S. crude widened to a near one-week high earlier on Thursday as it advanced more than U.S. crude. The spread between the two , a favorite play in oil, widened by more than $1 to above $10 a barrel in morning trade, its highest since Friday.

(Additional reporting by Robert Gibbons in New York, Himanshu Ojha in London and Keith Wallis in Singapore; Editing by Dale Hudson, David Evans, G Crosse, Jane Merriman, Chris Reese and Diane Craft)

WhatsAppFacebookTwitterLinkedinBeloudBluesky