Oil Falls On Supply Glut And Strong Dollar

Still, market fundamentals remain weak due to fears of an economic slowdown coupled with plentiful oil flows, according to Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

"We continue to have more than ample supply in U.S. production of crude and in the Atlantic basin. That's why the market has dropped as sharply. The realization that there's a considerable slowdown in demand will continue to fuel more selling pressure."

U.S. crude fell $1.35 to settle at $93.07 a barrel a day after dropping on government data that showed U.S. crude inventories rose 3.7 million barrels last week.

"To me, the market is playing off a little more of yesterday's bearish inventories. There's no shortage of oil anywhere," said Sal Umek, an analyst at Energy Management Institute in New York. "People are starting to square books off and roll over into the next month. We're in the final dribs and drabs of short-covering."

Investors were also wary of Thursday's referendum on independence in Scotland, home to most of Britain's North Sea oil reserves. Analysts say the result could affect oil prices.

(Reporting by Catherine Ngai, Alex Lawler and Jane Xie; Editing by Clara Ferreira Marques, Dale Hudson and Peter Galloway and David Gregorio)

Copyright 2014 Thomson Reuters.


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