Oil down on stronger greenback, rising U.S. rig count
Oil prices fell on Monday, extending losses from Friday after the U.S. dollar jumped to a three-week high and the U.S. rig count rose, although nearly a quarter of U.S. Gulf of Mexico output remained offline in the wake of two hurricanes.
Brent crude futures fell 48 cents, or 0.6%, to $74.86 a barrel at 0410 GMT after losing 33 cents on Friday.
U.S. West Texas Intermediate (WTI) crude futures fell 55 cents, or 0.8%, to $71.42 a barrel, after declining by 64 cents on Friday.
“Strength in the USD over the last couple of days has provided some headwinds to the market,” researchers at ING Bank said in a note on Monday.
“WTI crude may consolidate over the next few trading sessions until the trajectory of the dollar is a little clearer,” OANDA analyst Edward Moya said in a note.
ING said that a tapering announcement this week would “likely put some downward pressure on oil and the broader commodities complex,” although it added such an announcement was more likely in November.
A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand.
As of Friday, 23% of U.S. Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement reported.