LONDON--Oil prices fell on Friday pressured by a rising dollar
ahead of data on U.S. drilling activity capping a volatile week of
trading.
Brent crude for delivery in May fell 0.4% to $56.34 a barrel on
London's ICE Futures exchange. On the New York Mercantile Exchange,
May-dated light, sweet crude futures slid 1.2% to $50.20 a
barrel.
Oil-field-services firm Baker Hughes will release its weekly
U.S. oil rig count, a proxy for activity in the industry. The
number of oil drilling rigs has declined for 17 straight weeks and
stood at 802 last week, half of what it was just six months ago.
The rate of decline, however, has slowed in recent weeks while oil
production in the U.S. has been resilient.
The U.S. dollar strengthened on Friday pressuring oil which is
priced in dollars and becomes more expensive for holders of other
currencies as the greenback appreciates. The Wall Street Journal
Dollar Index, which tracks the buck against a basket of other
currencies, rose 0.2%.
Oil prices have risen for three of the past four trading
sessions, and investors are keeping a close watch on U.S. and OPEC
oil production levels, unrest in the Middle East and the Iranian
nuclear deal.
In his first public comments after last week's agreement on a
framework for a nuclear deal, Iran's supreme leader Ayatollah Ali
Khamenei said on Thursday that the U.S. and its negotiating
partners must lift all sanctions on his country immediately after a
final deal is signed. The West has been demanding a phased repeal
of the penalties, conditional on Iran's continuing compliance.
Oil markets are tracking the negotiations because a deal could
pave the way for more Iranian crude flooding the already
oversupplied global market. In 2011, the country produced about 3.6
million barrels of oil a day and analysts estimate that if
sanctions are lifted, Iran could add between 0.5 million and 1
million barrels a day to the already oversupplied global
market.
Next week, the International Energy Agency and the Organization
of the Petroleum Exporting Countries will publish their monthly
assessment of oil markets.
"We expect any rebound in crude oil prices to occur from the
third quarter of 2015," UOB Asset Management said in a quarterly
report.
Nymex reformulated gasoline blendstock for May--the benchmark
gasoline contract--fell 0.2% to $1.7551 a gallon, while ICE gasoil
for April changed hands at $527.50 a metric ton, down $0.75 from
Thursday's settlement.
Eric Yep contributed to this article.
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