Brent crude prices dropped by 41 cents, or 0.5 per cent, to $84.70 a barrel
Oil prices dropped on Friday as a strong dollar, mixed economic signals and concern over China’s economy weighed on investor sentiment.
Brent crude prices dropped by 41 cents, or 0.5 per cent, to $84.70 a barrel by 0650 GMT. U.S. West Texas Intermediate crude futures declined 49 cents, or 0.6 per cent, to $82.33 a barrel.
For the week, Brent was 0.3 per cent lower, while West Texas Intermediate was trading slightly up.
The U.S. dollar index jumped for the second successive session after stronger-than-expected data on the U.S. labour market and manufacturing earlier in the week. A stronger greenback lowers demand for dollar-denominated oil from buyers holding other currencies.
A lack of concrete stimulus measures from top oil importer China has also weighed on commodities overall, ANZ analysts stated in a note.
China’s economy grew at a slower-than-expected 4.7 per cent pace in the second quarter, according to official data, sparking concerns about the country’s oil demand.
Concerns over supply in the short term kept the losses minimal, ANZ said, however, referring to worsening wildfires threatening production in Canadian oil sands.
Elsewhere on the economic front, Japan’s core inflation picked up in June, leaving the door open for an interest rate hike in the major oil market.
Oil prices found some support in the prior two sessions after the U.S. government reported a bigger-than-expected weekly drop in oil stockpiles.
Analysts at consultancy firm FGE, however, said wider inventory trends look more bearish than expected this month. They noted U.S. crude stocks have drawn at a slower-than-usual pace for this time of the year and global fuel stocks increased last week.
