- Stronger US dollar, lingering concerns over supply glut weigh on oil prices.
- WTI crude tumbles below $60/barrel, threatens to end 8-week rally.
- Brent crude also declines toward $65/barrel.
US oil prices slipped below $60 a barrel on Friday, as a rebounding US dollar and lingering concerns about a global supply glut weighed on an otherwise improving outlook.
West Texas Intermediate (WTI) for June delivery fell $1.35 to $58.97 a barrel on the New York Mercantile Exchange. WTI is threatening to end an eight-week rally following back-to-back declines. The US benchmark climbed to a fresh 2015 high of nearly $62 a barrel on Wednesday before backtracking in the latter half of the week.
WTI has rallied more than 35 percent over the past eight weeks amid signs of growing international demand.
A ninth consecutive week of gains for WTI would mark the US benchmark’s longest winning streak since record keeping began in 1983.
Meanwhile, global benchmark Brent crude for July delivery tumbled $1.20 to $65.50 a barrel.
US Dollar Strengthens
The US dollar rallied on Friday after posting sharp declines throughout the week. The dollar index climbed 0.4 percent to 93.86.
Oil prices remain highly sensitive to movements in the US dollar, which has typically traded inversely with crude. Oil is priced in US dollars, making it less attractive to international buyers when the value of the greenback appreciates.
Supply Glut Concerns
US crude stockpiles declined for a second consecutive week last week, data from the Energy Information Administration (EIA) showed on Wednesday. The back-to-back decline end a four-month period of relentless growth in crude stockpiles.
Crude stockpiles declined by nearly 2.2 million in the week ended May 8, but remained very high at 485 million barrels. Oil inventories are still around 20 percent higher than they were a year ago, a sign the market could remain oversupplied for much longer.