WASHINGTON: OIL prices eased Friday as the dollar strengthened slightly, tugging the market away from the prior day’s new 2015 highs. US benchmark West Texas Intermediate for delivery in June shed 48 cents in closing at $59.15 a barrel.
In London, Brent North Sea crude for June delivery, the global benchmark, settled at $66.46 a barrel, down 32 cents from Thursday. Trading volumes were thin, with most Asian markets closed for public holidays, and many European players also away for a long May Day weekend.
“The petroleum markets are moderately lower on what looks like profit-taking ahead of the weekend as the US dollar has turned higher,” said Tim Evans of Citi Futures. A stronger dollar tends to dampen demand for crude oil that became more expensive for buyers using weaker currencies.
“Soft manufacturing PMI data from China and the US also suggest no particular acceleration on the physical demand side of the crude oil market,” Evans noted. On Thursday oil prices advanced to new 2015 peaks, winning traction from the first drop in US crude-oil stockpiles for six months.
Prices for both WTI and Brent rebounded by about 20 percent through April owing to several factors, including concerns about unrest in Yemen, the weakening dollar and fewer US rigs in operation to produce the black gold.
On Friday, the Baker Hughes US oil rig count showed another drop in the number of active rigs, to less than half than were operating a year ago. The rig report underpinned some analysts’ expectations of a decline in US crude production, which has been adding to the global oversupply.
Michael Smith of T&K Futures and Options predicted that, despite the modest pullback in prices Friday, the market would head higher as demand is expected to grow, especially with the approach of the US summer vacation driving season.
