WTI oil price at $69 mark on strong dollar, high stocks

US WTI oil prices are trading around the $69 mark in Asia on Wednesday after the latest report of record increase in US crude oil stocks and a stronger US dollar hit prices.

US Light crude oil futures for June delivery was seen trading as low as $68.19 a barrel at midday on Wednesday, Singapore time on the NYMEX.

Meanwhile, The euro has fallen to a new four year low against the US dollar, fetching only $1.2144 in New York trading, as the European debt crisis led to new financial restrictions by Germany spooking markets.

According to US API report, crude oil inventories at the Cushing, Oklahoma delivery point rose by 914,000 barrels to a fresh record high of 37.99 million barrels.

Some trading sources said the contango, the higher prices for contracts further out, could be an incentive for traders to try to take delivery. But other sources noted that the lack of storage available may increase volatility as too many traders try to exit positions just ahead of expiration.

Phil Flynn, an analyst at PFGBest in Chicago, said Tuesday’s early rally was doomed to fail, given the lopsided supply demand picture. “Oil bulls have been trying to shine a light on positive economic data as the reason to be blindingly bullish on oil. We have not seen the evidence that demand can overtake the amount of massive oversupply.”

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