Oil Drops On High OPEC Output, Firmer Dollar
NEW YORK, June 1 (Reuters) - Oil settled down as much as 1 percent on Monday, retreating from Friday's sharp rally on a strong dollar and concern over stubbornly high supplies as OPEC was expected to stick with robust production at its meeting this week.
The Organization of the Petroleum Exporting Countries pumped a 2-1/2 year high of 31.22 million barrels of oil per day (bpd) in May, a Reuters monthly survey showed.
The boost put OPEC production further above its target of 30 million bpd, underlining the focus of top exporter Saudi Arabia and other key members on market share.
The group meets on Friday and is expected to maintain its current production policy, keeping the world oil market amply supplied for the foreseeable future.
"OPEC continues to produce well above target, and also well above demand for its oil," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
The dollar rose half a percent against a basket of currencies on Monday, lifted by stronger-than-expected U.S. construction spending data and Greek debt woes. A strong greenback makes dollar-denominated commodities, such as oil, less affordable for holders of other currencies such as the euro.
Brent crude oil futures, settled down 68 cents, or 1 percent, at $64.88 a barrel.
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