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Monday, April 24, 2017
Crude oil fell on Monday as the Greek debt crisis boosted the dollar and raised concerns about demand for petroleum in Europe, and as the UN started talks to try to bring peace to Yemen, where OPEC heavyweight Saudi Arabia is involved in a civil war.Expiring front-month July Brent was down US$1.17 at US$62.70 a barrel at 11:42 a.m. EDT (1542 GMT).August Brent was off 57 cents at US$64.07, with losses more in line with the rest of the complex.US July crude was down 36 cents at US$59.60, having swung from US$58.73 to US$59.98.The spread between Brent and US crude was as little as US$2.96 a barrel intraday on Monday, the narrowest since January and having narrowed from more than US$7 a month ago and more than US$8 in April.Brent has fallen from a high above US$66 last week and appeared to be settling in a range between US$60 and US$65, said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt.Global stock markets fell on Monday after talks between Greece and its creditors collapsed on Sunday.The dollar strengthened, making dollar-denominated commodities like oil more expensive for consumers using other currencies.United Nations chief Ban Ki-moon launched Yemen peace talks in Geneva on Monday with a call for a humanitarian truce after warplanes from a Saudi-led Arab coalition pounded the capital, Sanaa."Weak US data didn't help the outlook for oil," said Phil Flynn, analyst at Price Futures Group in Chicago.US industrial production unexpectedly fell in May, according to data released on Monday, as a strong dollar and energy spending cuts continued to weigh on manufacturing and mining output.Oil futures also felt pressure from concerns about surplus supply with the Organization of the Petroleum Exporting Countries (OPEC) pumping about 2 million barrels per day (bpd) more than needed, according to most industry estimates.Output is increasing in Libya, where production has been constrained by civil war.Production also has risen in Saudi Arabia and Iraq, and a deal with Iran on its nuclear program may soon lead to sanctions being lifted, allowing Tehran to increase oil exports."Sentiment this morning gets a bearish touch from negative equities, a dollar to the strong side, Greek concerns and news of some increase in Libya oil production," said Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo.
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