Commodities: Oil prices fall on strong dollar, oversupply concerns

At 1309 BST Brent crude fell 0.7% to $45.36 per barrel and West Texas Intermediate dropped 0.82% to $43.83 per barrel.

Morgan Stanley said the global oil market was “severely oversupplied” with gasoline and headwinds were growing for the second half of the year, leading to expectations of lower oil prices.

“Given the oversupply in the refined product markets, fading refinery margins, and economic run cuts, we expect crude oil demand to deteriorate further over the coming months,” the analyst said.

Barclays said weak economic growth had hurt the sector with global oil demand in the third quarter of 2016 expanding at less than a third of the rate compared to the same period a year earlier.

A strong dollar and a data showing an increase in the US oil rig count also dragged on prices. Baker Hughes on Friday reported the fourth weekly increase in a row of oil rigs, up 14 to 271.

The strength of the dollar also hurt gold prices as traders looked ahead to the Federal Reserve’s interest rate decision on Wednesday.

“Additional downwards pressure could be forthcoming this week if the Fed meeting produces any hawkish rhetoric, which would move the USD,” said Accendo Markets analysts Mike van Dulken and Augustin Eden.

Gold on the Comex fell 0.54% to $1,316.30 per ounce. Comex silver and spot platinum also dropped, 1.09% and 0.93% respectively.