Nymex Crude Settles Lower After Four-Day Rally

Crude-oil futures slipped Friday, snapping a four-day rally, as investors locked in gains at the end of the second quarter.

Light, sweet crude for August delivery settled 49 cents, or 0.5%, lower at $96.56 a barrel on the New York Mercantile Exchange. ICE North Sea Brent crude oil for August delivery recently fell 69 cents, or 0.7%, to $102.13 a barrel.

Futures ended lower after spending the session swinging between positive and negative territory. Nymex crude hit an intraday high of $97.63 a barrel and were on track to end the day higher, before turning lower late in the session.

"By midday Friday, the oil market had a five-day rally which saw some profits being taken," said Addison Armstrong, senior director for market research at Tradition Energy.

Oil prices pushed higher this week following supply disruptions caused by a shutdown of oil pipelines in Canada and assurances by Federal Reserve officials that short-term interest rates were unlikely to be raised soon.

But Friday, the strength of the U.S. dollar contributed to the weakness in crude-oil futures. The ICE index, a measure of the dollar against a basket of currencies, was recently 0.3% higher compared with Thursday. Since oil is denominated in U.S. dollars, a strengthening dollar makes oil more expensive for buyers holding other currencies.

Analysts said that there were few supply or demand cues moving the market Friday, particularly as trading volume was thinner ahead of a holiday week. Oil futures have been stuck in a tight range between $90 and $99 a barrel over the last two months.

"We are going to need a supply disruption, stronger economic data from the U.S. or China to really give a bid to oil prices," said Tariq Zahir, managing member of Tyche Capital Advisors.

Traders have been watching for key economic data and statements from the Federal Reserve to gauge economic growth in the U.S., the world's largest consumer of oil. Next week, traders will be eyeing the closely watched monthly employment report for clues on the health of the U.S. economy. Strong economic growth leads to greater energy use by businesses and oil demand from motorists.

Front-month July reformulated gasoline blendstock, or RBOB, settled 0.94 cent higher at $2.7520 a gallon. July heating oil settled 0.96 cent lower at $2.8798 a gallon.

Copyright (c) 2012 Dow Jones & Company, Inc.


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