By Nicole Friedman
NEW YORK--Oil prices slid Friday as the dollar strengthened and
the decline in U.S. drilling slowed down.
Light, sweet crude for July delivery settled down $1, or 1.6%,
at $59.72 a barrel on the New York Mercantile Exchange. Prices fell
1.4% this week, snapping a three-week winning streak.
Brent, the global benchmark, fell $1.17, or 1.8%, to $65.37 a
barrel on ICE Futures Europe, posting a 2.2% weekly loss.
The price of oil has moved inversely to that of the dollar in
recent weeks, with some analysts attributing nearly all of a recent
rally in oil prices to a weakening in the dollar. The global crude
market remains oversupplied, and some analysts warn that the rally
was unsustainable and oil prices are likely to slump from current
levels later this year.
The dollar rose Friday after the Labor Department said that U.S.
consumer prices rose for the third straight month in April. The WSJ
Dollar Index, which tracks the greenback against other major
currencies, recently rose 0.7%.
A strong dollar makes oil, which is priced in dollars, more
expensive to foreign buyers.
The oil market "doesn't look like it's moving too much on
fundamentals as much as it's really moving inverse to the dollar
every day," said Mark Benigno, co-director of energy trading at
INTL FCStone Inc.
In addition, weekly drilling data showed that the number of rigs
drilling for oil in the U.S. fell by only one last week, indicating
that the sharp decline in U.S. drilling in recent months may be
nearing an end. Some companies have said they can increase activity
if prices stabilize above $60 a barrel, which could add to the
global glut of crude that continues to weigh on the market.
Prices rallied earlier in the week ahead of the Memorial Day
weekend holiday, the unofficial start to the summer driving season.
U.S. driving has picked up in recent months because of cheaper
gasoline and a strengthening economy. Retail prices at the pump are
at the lowest level for this time of year since 2009.
Gasoline futures settled down 2.85 cents, or 1.4%, at $2.0539 a
gallon, down 0.1% on the week. Diesel futures fell 3.34 cents, or
1.7%, to $1.9525 a gallon, posting a 2.6% weekly loss.
Georgi Kantchev
contributed to this article.
Write to Nicole Friedman at nicole.friedman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires