Oil drops 1% on strong USD

Oil prices at both sides of the Atlantic dropped 1% in Asia due to the strength in the US dollar.

At the time of writing, WTI oil was trading 1% or 47 cents lower at $44.95/barrel. Meanwhile, Brent oil was trading 0.90% or 41 cents lower at $46.08/barrel.

The USD index rose to 101.37; its highest level since April 2003. The rally in the USD overshadowed the OPEC cut optimism.

OPEC will cap its total production at 32.5 million barrels per day in order to balance the oil market, Saudi Arabia’s oil minister Khalid al-Falih said on Thursday. However, that failed to keep the oil markets happy.

The focus remains on the US dollar, OPEC related news flow and the Baker Hughes US oil rig count number due for release later today.