NEW YORK – Oil prices decreased on Friday on concerns about the US economy, but Brent crude held close to $50/bbl in choppy trading with support from a weaker dollar and relief that most OPEC members do not plan to flood the market with excess crude, according to a Reuters report.
Weaker-than-expected US non-farm payroll data sent the dollar index to its lowest since mid-May, which also supported crude prices. A weaker dollar makes oil cheaper for holders of other currencies.
But the numbers were negative for the US economy which could limit energy demand, leading to the “push-pull” in the oil market, traders and brokers told Reuters.
Brent crude futures dipped $.08 to $49.96/bbl. Brent’s price still remained almost double January lows, on track for its eighth weekly gain in nine weeks, according to the report.
US West Texas Intermediate crude futures were down $.17 at $49, on track for its first weekly decline in four weeks.
Oil prices have rallied from this winter’s lows due largely to supply disruptions, particularly in Nigeria, Venezuela, Libya, and Canada. On Friday, militants in the restive Niger Delta region that produces more than half of Nigeria’s oil claimed three new attacks on oil infrastructure, promising to bring the country’s oil production to “zero.”
The tone of the OPEC meeting in Vienna on Thursday supported prices “from the perspective that none of the major players (except Iran) indicated that they would be further flooding the market with oil anytime soon,” Energy Management Institute analyst Dominick Chirichella was quoted as saying.
Still, analysts have said it would take more time for the oil market to rebalance fully.