• Fri. Dec 8th, 2023
Oil prices ease on profit-taking, weekly gains still record
  • Brent and WTI crude fell nearly 2% as traders booked profits
  • The dollar recovers as investors consolidate losses
  • Libyan oil fields shut down following protests; The Nigerian stopped loading
  • Despite Friday’s losses, oil benchmarks are up for the week

BENGALURU, July 14 (Reuters) – Oil prices fell more than a dollar a barrel on Friday as oil traders booked profits from a strong rally as the dollar strengthened and crude benchmarks posted a third straight weekly gain.

Brent crude futures were down $1.49, or 1.8%, at $79.87 a barrel, while U.S. West Texas Intermediate crude futures were down $1.47, or 1.9%, at $75.42 a barrel.

“It looks like it’s taking some profit and some demand concerns are coming back front and center as the dollar comes back,” said John Kilduff, partner at Again Capital.

The U.S. dollar index (.DXY) rose to a 15-month low in the session as investors consolidated ahead of the weekend. A stronger greenback reduces oil demand, making crude more expensive for investors holding other currencies.

However, the rally will resume next week as easing inflation, plans to refill the US strategic reserve, supply cuts and disruptions will support the market, said Rob Haworth, senior investment strategist at US Bank Wealth Management.

“Although oil prices are likely to be slightly overbought in the near term, the bias appears to be very high, having reached the highest level since early May,” Haworth said.

Oil prices rose nearly 2% on a weekly basis after supply disruptions in Libya and Nigeria raised concerns that markets could tighten in the coming months.

Several oil fields in Libya were shut down on Thursday after a local tribe protested the kidnapping of a former minister. Nigeria’s Forcados crude oil loading dock has been suspended due to a possible spill at one terminal.

The Libyan disruption is cutting 370,000 barrels per day (bpd), while the loss from the Nigerian disruption is 225,000 bpd, PVM analyst John Evans said.

Russian oil exports also fell sharply, and if the trend continues next week, it could push prices higher as Russian oil exports fall by 500,000 bpd in August, Commerzbank analysts added.

(This story has been corrected to change the Brent price unit to ‘per barrel’ in paragraph 2)

Reporting by Shariq Khan in Bengaluru; Additional reporting by Natalie Grover in London, Sudarshan Varadhan in Singapore, Katya Golubkova in Tokyo, Editing by Louise Havens, David Gregorio, Mark Potter and Deepa Babington

Our standards: Thomson Reuters Trust Principles.

Shariq reports on energy markets with a focus on US physical refined products and the global financial oil market. He is a regular contributor to corporate moves at leading shale companies including energy M&A, oil majors and top oil focused private equity firms. He was nominated as the 2020 Reuters Journalist of the Year.

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