(Adds latest prices, changes dateline to New York)
By Laura Sanicola
NEW YORK, Nov 15 (Reuters) - Oil prices slipped to a
one-week low on Monday on expectations supplies will increase
while demand will be pressured by the recent surge in energy
costs, the strong dollar and rising COVID-19 cases.
Brent futures fell 76 cents, or 0.9%, to $81.41 a
barrel by 1:13 p.m. EST (1813 GMT), while U.S. West Texas
Intermediate (WTI) crude fell 70 cents, or 0.9%, to
$80.09.
That puts both benchmarks on track to fall to their lowest
close since Nov. 4.
The strong dollar weighed on oil prices, along with ongoing
speculation that President Joe Biden's administration will
release oil from the U.S. Strategic Petroleum Reserve.
The safe-haven U.S. dollar hit a 16-month high
against a basket of major peers as investors worried about the
global economy. A stronger dollar makes oil more
expensive for buyers using other currencies.
Last week, U.S. energy firms added oil and natural gas rigs
for a third week in a row, encouraged by a 65% increase in U.S.
crude prices so far this year.
U.S. shale production in December is expected to reach
prepandemic levels of 8.68 million barrels a day, according to
Rystad Energy. Meanwhile there are indications demand may be
slowing due to heightened coronavirus cases and inflation.
The Organization of the Petroleum Exporting Countries (OPEC)
last week cut its world oil demand forecast for the fourth
quarter by 330,000 bpd from last month's forecast, as high
energy prices hampered economic recovery from the COVID-19
pandemic.
"The market now seems to be less concerned about the current
supply tightness, expecting it to be short-lived," Rystad senior
markets analyst Louise Dickson said. "Traders are instead
refocusing on the return of two bearish factors – the
possibility of more oil supply sources and more COVID-19 cases."
UAE Energy Minister Suhail al-Mazrouei said all indications
point to an oil supply surplus in the first quarter of 2022.
"There's little chance of OPEC+ raising output faster,
especially if ... the group expects the market to return to
surplus in the first quarter of 2022," said Craig Erlam, senior
markets analyst at OANDA.
Europe has again become the epicenter of the COVID-19
pandemic, prompting some governments to consider re-imposing
lockdowns, while China is battling the spread of its biggest
outbreak caused by the Delta variant.
Royal Dutch Shell PLC said it would scrap its dual
share structure and move its head office to Britain from the
Netherlands.
(Additional reporting by Noah Browning, Naveen Thukral, Roslan
Khasawneh and Scott DiSavino; Editing by Maju Samuel, Steve
Orlofsky and David Gregorio)
