US Crude Tumbles 5%, Wall Street Selloff Offsets Rig Data
NEW YORK, Sept 18 (Reuters) - Oil prices tumbled on Friday, with U.S. crude falling 5 percent, after a selloff in Wall Street equities offset positive impact to crude from a third weekly decline in the U.S. oil rig count.
A rise in the dollar, fears that OPEC oil production will not slow and reduced political tensions in the Middle East from U.S-Russia talks on Syria also weighed on oil.
Oil services firm Baker Hughes's report on the weekly U.S. oil rig count showed a drop of eight rigs this week. It was the third weekly decline in the rig count, a sign that the renewed decline in crude prices since July may be slowing some drillers from returning to the well pad in a bigger way.
U.S. crude futures, already down 3 percent when the Baker Hughes report came out, pared losses just briefly on the news.
"The industry is getting so much more production from new technology that a decline in working rigs doesn't mean nearly as much as it used to," said David Thompson at Powerhouse, a commodities broker in Washington specializing in energy.
"The rig statistics will vary from week to week on impact, but I'm not sure I would attach a huge significance solely on a drop in the rig count," he added.
As oil markets neared settlement, they began a sharp descend. The dollar rebounded from a 3-week hit earlier in the day after a Federal Reserve decision to keep interest rates unchanged. Wall Street's key S&P 500 stock index headed for their biggest rout in over a week after the Fed decision.
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