Crude Oil Lower On Dollar Rally

Brent crude oil was steady at $62.10 at 9:00 GMT on Wednesday morning after losing some strength on Tuesday due to a rising dollar. The commodity looked likely to finish the year above $60 as trading was subdued ahead of the Christmas holiday.

The dollar surged to its highest level in nearly nine years on Tuesday after U.S. data painted a healthy picture of the nation’s economy. Though a strong economy also translates into increased energy consumption, the increased prospective demand did little to ease investors’ minds about the growing global supply glut.

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GDP data from the United States showed that the nation’s third quarter GDP was at its highest level in over a decade at 5 percent. The figure was encouraging, though it raised some questions about fourth quarter performance. With inflation rates so high, many are worried that fourth quarter GDP will be significantly lower, or that inflation will rise quickly and put more pressure on the Federal Reserve.

CNBC reported that energy companies are likely to find ways to adapt to the new, lower prices in 2015 in order to cope. Most analysts see crude remaining below $70 well into the new year, something that will likely hurt profitability for many energy firms.

Moving forward investors will be waiting for U.S. oil inventory data due out later in the day before the markets close early. The American Petroleum Institute released a report on Tuesday showing that U.S. crude stocks increased by 5.4 million barrels last week, a far cry from the 2.3 million barrel decline that had been forecasted.