Oil retreated on Friday as the US dollar advanced to near a seven-month high and US crude stockpiles climbed for the first time since August.
The greenback rose the fourth time in five days against its peers, making US dollar-denominated commodities less appealing to investors.
West Texas Intermediate (WTI) oil for November delivery declined US$0.09 to close at US$50.35 per barrel on the New York Mercantile Exchange. The contract climbed 1.1 percent this week. Total volume traded was 27 percent above the 100-day average.
Brent for December settlement on Friday fell US$0.08 to US$51.95 per barrel on the London-based ICE Futures Europe exchange. It is little changed from the previous Friday’s US$51.93 per barrel.
The global benchmark closed at a US$1.20 premium to WTI for December.
OPEC took a step toward coordinated supply curbs with Russia this week and is to meet for a “technical exchange” to set a road map for output levels later this month.
OPEC ministers achieved their main goal this week at the World Energy Congress in Istanbul as Russia’s two largest oil producers agreed to comply with any government instructions to curb output, following Russian President Vladimir Putin’s backing on Monday for a supply deal.
That leaves the success or failure of an accord involving producers of half the world’s oil in the hands of an OPEC committee, which is to meet later this month to resolve disputes over how much Venezuela and Iraq should pump.
The US dollar advanced after a report showing US retail sales rose by the most in three months bolstered the US Federal Reserve’s case to raise interest rates by year-end. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose as much as 0.4 percent.
US crude supplies increased 4.85 million barrels last week, a US Energy Information Administration (EIA) report showed on Thursday.
The gain left US crude supplies at 474 million barrels in the week ended on Oct. 7, according to EIA data.
US stockpiles remain at the highest seasonal level in more than 20 years. Supplies at Cushing, Oklahoma, the delivery point for US oil futures, fell 1.32 million barrels to the lowest level this year.
“The [US] dollar is near a seven-month high, which puts some pressure on crude,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc in New York. “Crude supplies rose last week. Even though the product supplies and Cushing were up, the report is basically bearish for crude oil.”
US crude production fell by 17,000 barrels a day to 8.45 million, according to the EIA.
Growth could resume quickly, according to Norbert Ruecker, head of commodity research at Julius Baer Group Ltd in Zurich.
“It’s quite interesting to see the upbeat sentiment in North American exploration and production and how quickly the cycle has turned,” Ruecker said. “At the beginning of the year everyone was focused on balance sheets and earnings. Now the focus seems to be on growth, so that’s a very, very, quickly spinning cycle.”
The number of oil rigs operating in the US this week climbed to the highest since February, rising by four to 432, according to Baker Hughes Inc.
Other oil market news:
‧ Algeria’s OPEC governor Mohamed Hamel has been appointed chairman of the high-level committee set up to finalize details of the group’s deal to curb output, according to three people familiar with the matter.
‧ RSP Permian Inc agreed to pay US$2.4 billion in cash and stock for Silver Hill Energy Partners amid increasing competition for drilling rights in the biggest US oil field.
‧ Kashagan, a vast oil field in the Caspian Sea, sent its first crude oil for export after about 16 years in development and more than US$50 billion of investments.
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