Oil prices edge lower on stronger dollar, ample supply

SINGAPORE, July 21 (Reuters) - Oil prices edged lower in
early Asian trade on Tuesday, pushed down by a stronger dollar
and still ample supply of both crude and refined products.
U.S. August crude CLc1 , set to expire on Tuesday, fell 12
cents to 50.03 a barrel by 0054 GMT. The front-month contract
fell below $50 a barrel on Monday for the first time since
April.
Brent September crude LCOc1 was 10 cents lower at $56.55 a
barrel, after settling 45 cents lower.
Prices also came under pressure from a strengthening dollar,
which is trading close to three-month highs .DXY on
expectations of higher U.S. interest rates. A stronger dollar
makes crude more expensive for investors using other currencies.
Saudi Arabia's domestic crude oil inventories jumped to a
record in May, although the rise likely reflected the
operational demands of a major new refinery rather than another
sign of a global supply glut. ID:nL1N1001AE
Brent is down about $7 a barrel so far this month with U.S.
crude more than $9 lower on expectations of more Iranian supply
following a nuclear deal and concerns that economic worries in
China and Europe will weigh on demand.
However, Iranian oil is unlikely to hit the market until the
second quarter of next year, while "there has been enough
stimulus injected into the financial system to provide uplift to
global growth in second half of 2015," analysts at PIRA Energy
said in a note.
"Pessimism about oil prices because of the Iran nuclear deal
and economic concern about China and Europe are overblown," they
said.
U.S. commercial crude oil stocks likely fell about 2.1
million barrels in the week ended July 17, according to a
preliminary Reuters survey. ID:nL1N1001JF
Still, analysts at ANZ said "expectations of another
increase in inventories at Cushing are keeping downward pressure
on prices."
The Reuters poll was taken ahead of weekly inventory reports
from the American Petroleum Institute (API) due at 2030 GMT and
the U.S. Energy Information Administration (EIA) due Wednesday.