U.S. oil futures settled on Friday with a loss of nearly 4% for the week, posting the lowest close in more than three months.
Prices had dropped close to $50 a barrel during the session, pressured by ongoing concerns over a glut of crude supplies and a stronger U.S. dollar, but pared most of their losses after Baker Hughes reported a weekly decline in the number of active U.S. oil rigs. August West Texas Intermediate crude shed 2 cents to settle at $50.89 a barrel on the New York Mercantile Exchange after tapping a low of $50.14. Prices marked their lowest settlement since early April. They ended the week down 3.5%.
September Brent crude added 18 cents, or 0.3%, to $57.10 a barrel. The European benchmark also diverged from WTI on Thursday, rising amid an oil-field outage and a contract expiration. For the week, the contract lost around 3.2%. Baker Hughes on Friday reported a weekly decline in the total number of active U.S. drilling rigs. It fell 7 rigs to 638 as of July 17 and marked the first weekly decline in three weeks, helping to ease some worries about strong oil production and a glut of supplies. But in recent weeks, “fundamental pressures” such as the announcement of the Iranian nuclear agreement and U.S. weekly inventory reports have weighed on oil prices, said Tim Evans, an energy futures specialist at Citi Futures, in a note. The agreement between Iran and the West over Iran’s nuclear program is expected to eventually result in the addition of millions of barrels of oil to the world’s oil markets, but some analysts say that may take several months.
Meanwhile, U.S. government data released Wednesday showed a sizable weekly decline in crude inventories, along with a hefty increase in distillate supplies. Evans also noted that the dollar’s path has been higher over the past few weeks, weighing on dollar-denominated commodities like oil. The ICE U.S. dollar index traded about 1.9% higher for the week.
Data released Friday showed that the U.S. consumer-price index rose a seasonally adjusted 0.3% in June. That matched the forecast of economists polled by MarketWatch. Consumer sentiment in July, however, fell to a preliminary reading of 93.3 from a final June level of 96.1.