Oil tumbles to multi-month lows, dollar hits year high

Oil futures fell nearly two percent in American trade, with US crude plumbing June 22 lows, while Brent touched April 17 lows, as the dollar index climbed to June 28, 2017 highs, after OPEC released its monthly report on global demand.  

As of 05:06 GMT, US crude futures due in September tumbled 2.51% to $65.93 a barrel, while Brent October futures swooned 1.95% to $71.39 a barrel, as the dollar index inched up 0.07% to 96.43, marking 13-month highs. 

OPEC's Monthly Report  

In its monthly report, OPEC expected demand on its oil to decline next year as rival producers pump more crude into the market, forecasting demand of 32.05 million bpd on OPEC next year, down 130 thousand bpd from previous forecasts. 

The oil cartel also reported that production in July rose to 32.32 million bpd, or above demand forecasts, with the organization expecting supplies from members to increase by 2.13 million bpd, with total oil demand in 2019 amounting to 100.26 million bpd. 

Finally, OPEC expects oil supplies outside the organization to reach 61.75 million bpd next year. 

Otherwise, the US Energy Information Administration cut forecasts for global oil demand growth by 60 thousand bpd in 2018, and by 140 thousand bpd in 2019 to 1.66 million and 1.57 million bpd respectively, while expecting US output to rise by 1.31 million bpd this year, down from 1.44 million in previous forecasts.  

IEA Releases Monthly Report 

The International Energy Agency recently released its monthly report, at which it noted receding worries over supply shortages as producers raise output around the world, while oil demand is expected to rise by 110 thousand bpd in 2019.  

The EIA expects oil supplies outside OPEC to rise by 100 thousand bpd in 2018 and 2019, noting nonetheless that maintaining current levels of oil supplies will be quire difficult in the future as US embargoes Iranian exports in November, while other producers face issues as well.

The US has reimposed blanket sanctions on Iran last week week, targeting its access to dollars, gold, and precious metals amid a push by the American administration to isolate Iran. 

Société Générale expects the US sanctions in November to cut Iranian exports by about one million bpd. 

US Oil Rig Count 

Banker Hughes, a US oil services company, reported an increase of 10 in the rig count to a total of 869 rigs, the first increase in three weeks.

US output is down to 10.80 million bod, still above Saudi Arabia's 10.29 million bpd levels, while below Russia's 11.21 million bpd.