Oil Prices Ease From 2016 Highs on Stronger Dollar
Crude oil drips from a valve at an oil well operated by Venezuela's state oil company PDVSA, in the oil rich Orinoco belt, near Morichal at the state of Monagas April 16, 2015. REUTERS/Carlos Garcia Rawlins/File Photo
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Oil prices fell on Friday, as a stronger dollar pulled crude off 2016 highs hit this week, although strong refinery demand and global supply disruptions lent support.
Brent oil futures were trading at $51.15 per barrel at 5.10 a.m. ET, down 80 cents while U.S. West Texas Intermediate (WTI) futures were down 85 cents at $49.71 a barrel.
Analysts said that a rebound in the dollar had dented oil prices by making fuel imports for countries using other currencies more expensive.
The dollar index was up 0.28 percent adding to Thursday's gains as jittery global financial markets sent investors toward safe haven currencies.
"Oil prices eased back from a near 12-month high as the dollar reversed its recent trend," ANZ bank said on Friday adding that supply disruptions around the world should help to keep prices from falling deeper.
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Crude prices have almost doubled since touching their lowest in more than a decade in early 2016 as strong demand and supply disruptions erode a glut that pulled down prices by as much as 70 percent from a mid-2014 peak.
Declines in U.S. shale oil output are being compounded by steep falls in Nigerian production due to attacks by militants and in Canada due to forest fires.
The U.S. government said on Thursday unplanned global oil supply disruptions averaged more than 3.6 million bpd in May, the highest monthly level recorded since it started tracking disruptions in January 2011.
On Friday, the Niger Delta Avengers militant group said it had blown up the Obi Obi Brass trunk line operated by ENI.
On the demand side, global refining activity is expected to hit a record high just as crude supply disruptions around the world tighten the market.
Available global refining capacity will reach 101.8 million bpd in August, its highest on record, and up from around 97.25 million bpd in March, data on Thomson Reuters Eikon shows.
Investment bank Jefferies said on Friday that U.S. refinery utilization reached 90.9 percent in the first week of June.
Consultancy JBC Energy said it had increased its 2016 oil demand growth outlook to above 1.4 million barrels per day, largely on increased U.S. gasoline consumption.