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Oil Falls on Stronger Dollar

Oil Falls on Stronger DollarOil Falls on Stronger Dollar

Oil prices ended a three-day bull run on Friday, falling as a strong dollar weighed and investors cashed in on recent gains, though losses were cushioned by outages in Nigeria that have slashed output there to the lowest in 22 years.

The dollar hit a two-week high against a basket of currencies, lifted by expectations the US Federal Reserve will raise rates again before any other major central bank, Reuters reported.

Global benchmark Brent crude futures were down 45 cents at $47.63 a barrel. US West Texas Intermediate crude futures traded at $46.09 a barrel on Friday, down 61 cents day on day.

The strong US currency weighed on greenback-denominated commodities such as oil futures, making fuel imports more expensive for countries using other currencies and potentially hitting demand.

Brent futures briefly turned positive in early European trading after traders said Exxon Mobil had declared force majeure on Nigerian Qua Iboe crude exports following mechanical problems with a pipeline.

The production glitch came after a number of other outages reduced Nigeria’s crude output close to a 22-year low.

Nigeria’s finance minister told NTA television the country’s oil production, the highest among African nations, had dropped to 1.65 million barrels per day from 2.2 million bpd seen before the outages. Production losses in Nigeria added to ongoing outages in Canada where wildfires forced the closure of oil sands facilities and declarations of force majeure from at least four major oil firms.

Financialtribune.com