NEW YORK: US oil slipped by over 2 percent for the week, the first time the benchmark has dropped for six straight weeks since December 1998 despite going up for almost a dollar at the end of the previous week.
The Friday rally was driven in part by geopolitical tremors in Ukraine and the dollar backing off of its four-year high. Brent crude futures settled up 53 cents at US$83.39 per barrel, but declined nearly 3% for the week, the seventh straight week down. The last time Brent fell for seven straight weeks ended in November 2002.
The dollar helped drive both the daily gains and the weekly losses, as Friday it retreated from its strongest level against a basket of foreign currencies in over four years. A strong dollar stunts the price of dollar-denominated oil benchmarks. The Ukrainian military accused Russia of sending 32 tanks and truckloads of troops across the border, which if true would signal an end to the lull in violence between the two countries. Renewed fighting in the region could disrupt oil flows, throttle supply, and drive worldwide prices up.
However, some traders are sceptical that another flaring of violence in the region could affect supply and prices. US job growth increased in October and unemployment fell to a 6 year low of 5.8%. Frigid forecasts for the U.S. Midwest driven by a polar vortex in the next two weeks boosted the market for heating oil, indirectly boosting demand for crude oil which can be refined to heat homes.
