Oil prices fell on Monday as the Greek debt crisis helped boost the dollar, making fuel more expensive to holders of other currencies, and as United Nations talks offered a chance for peace in Yemen where crude exporter Saudi Arabia is involved in a civil war.
Brent crude oil LCOc1 dropped $1.22 to a low of $62.65 a barrel, before recovering to trade around $62.77, down $1.10, by 6.25 a.m. EDT. U.S. light crude oil CLc1, also known as West Texas Intermediate (WTI), fell to a low of $59.08, down 88 cents.
Warplanes from a Saudi-led coalition bombarded Yemen’s capital Sanaa overnight, a Reuters witness said, as warring factions prepared for talks due to start in Geneva on Monday.
Investors are increasingly concerned about surplus supply in the global oil market with the Organization of the Petroleum Exporting Countries pumping around 2 million barrels per day (bpd) more than needed, according to most industry estimates.
Production has been increasing in top OPEC exporters Saudi Arabia and Iraq.
Output is also increasing in Libya, where production has been constrained by civil war.
Brent has fallen from a high above $66 last week and appears to be settling into a range between $60 and $65, said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.