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 The dollar hit a more than 11-year high against a basket of
currencies after the U.S. unemployment rate in February fell to its
lowest level since May 2008, making commodities priced in the
greenback more expensive for holders of other currencies. [USD/]
Oil inventories are rising across the world as production outstrips
demand, offsetting tensions in the Middle East and the risk of
output cuts in Libya and Iraq. [EIA/S]
Brent <LCOc1> was down 35 cents at $59.38 a barrel by 1130 GMT. The
North Sea crude oil futures contract fell 4.6 percent last week in
its biggest decline since the week ended Jan. 9.
U.S. crude <CLc1> was up 5 cents a barrel at $49.67. It closed down
$1.15 on Friday, ending a third week of declines.
 "More and more investors are coming to the conclusion that the
market is awash with oil," said Carsten Fritsch, senior oil and
commodities analyst at Commerzbank in Frankfurt. "Unprecedented
stocks levels cannot be ignored forever."
Goldman Sachs <GS.N> analysts argued in a note to clients that oil
prices would reverse recent gains due to rising global inventories.
They forecast U.S. crude would drop to around $40 a barrel.
Oil producers in the Organization of the Petroleum Exporting
Countries (OPEC) have opted not to curb output, despite oversupply
in many parts of the world, choosing to defend market share rather
than try to support oil prices.
OPEC Secretary-General Abdullah al-Badri has said the group should
not cut output to "subsidize" higher-cost shale oil, now being
produced in large quantities in North America.
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Oil prices fell by 60 percent between June 2014 and this January but
recovered by almost a third between January and February on Middle
East supply disruptions, strong winter demand and high refinery
margins.
Fighting in several oil-rich countries has kept a lid on production
and exports.
In Libya, up to 10 foreign workers are missing in the latest attack
on oilfields by Islamist militants and there is a possibility they
have been taken hostage, Czech and Libyan officials said on
Saturday.
(Additional reporting by Keith Wallis in Singapore; editing by Jason
Neely and William Hardy)
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