Oil down on stronger dollar, rising U.S. rig rely

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SINGAPORE — Oil costs dropped on Monday, extending final week’s losses after the U.S. greenback jumped to a three-week excessive and the U.S. rig rely rose, though almost 1 / 4 of U.S. Gulf of Mexico output stayed offline within the wake of two hurricanes.

Brent crude futures fell 61 cents, or 0.8%, to $74.73 a barrel at 0650 GMT after shedding 33 cents on Friday.

U.S. West Texas Intermediate (WTI) crude futures fell 66 cents, or 0.9%, to $71.31 a barrel, after declining 64 cents on Friday.

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“Energy within the USD during the last couple of days has supplied some headwinds to the market,” researchers at ING Financial institution mentioned in a notice on Monday.

Oil fell with the dollar close to a three-week excessive following a rally on Friday on better-than-expected U.S. retail gross sales information. That bolstered expectations for the U.S. Federal Reserve to start decreasing asset purchases later this yr.

“WTI crude could consolidate over the following few buying and selling classes till the trajectory of the greenback is a bit clearer,” OANDA analyst Edward Moya mentioned in a notice.

ING mentioned a tapering announcement this week would “doubtless put some downward stress on oil and the broader commodities complicated,” though it added such a step was extra doubtless in November.

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A stronger dollar makes U.S. dollar-priced oil costlier for holders of different currencies, curbing demand.

An increase within the U.S. rig rely additionally saved a lid on oil costs. The oil and fuel rig rely rose by 9 to 512 within the week to Sept. 17, its highest since April 2020 and double the extent from this time final yr, Baker Hughes mentioned on Friday.

By Friday, 23% of U.S. Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Security and Environmental Enforcement mentioned. (Reporting by Sonali Paul in Melbourne, Roslan Khasawneh and Koustav Samanta in Singapore; Enhancing by Tom Hogue and Clarence Fernandez)

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