Investing.com - U.S. oil futures fell to the lowest level in more than three months on Friday, as ongoing concerns over a glut of crude supplies and a broadly stronger U.S. dollar weighed.
On the New York Mercantile Exchange, crude oil for delivery in September hit an intraday low of $50.50 a barrel, a level not seen since April 10, before ending at $51.21, down 3 cents, or 0.06%.
On the week, New York-traded oil futures slumped $1.26, or 3.51%, the fifth consecutive weekly loss, as worries over high domestic U.S. oil production weighed.
Nymex oil prices bounced off the lowest levels of the session after industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. declined by seven last week to 638, snapping two weeks of gains.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.3% to end at a seven-week high of 98.09 late Friday.
The greenback rallied after upbeat U.S. inflation and housing data added to expectations for an interest rate hike this fall.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Elsewhere, on the ICE Futures Exchange in London, Brent for September delivery tacked on 18 cents, or 0.32%, to close at $57.10 a barrel after hitting a session low of $56.40, the weakest level since July 8.
For the week, London-traded Brent futures lost $1.49, or 3.22%, the third straight weekly decline, amid concerns a resumption of Iranian oil exports will add to a global glut.
Iran and six world powers reached a long-awaited nuclear deal earlier in the week that would end sanctions on Tehran in exchange for curbs on the country's disputed nuclear program.
Iran reportedly hoards 30 million barrels of oil in its reserves ready for export. However, analysts largely estimate that Iranian crude exports could take several months to ramp up significantly.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $5.89 a barrel by close of trade on Friday, compared to $6.26 in the preceding week.
In the week ahead, market players will focus on U.S. data on home sales and jobless claims for further indications on the strength of the economy and the timing of an interest rate hike.
Manufacturing data from China, the euro zone and the U.S. will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there is no relevant data on this day.
Tuesday, July 21
The American Petroleum Institute, an industry group, is to publish its weekly report on oil supplies.
Wednesday, July 22
The U.S. is to release private sector data on existing home sales as well as a government report on crude oil inventories.
Thursday, July 23
The U.S. is to report on initial jobless claims.
Friday, July 24
China is to publish the preliminary reading of the HSBC manufacturing index.
The euro zone is to release survey data on private sector activity.
The U.S. is to round up the week with reports on manufacturing activity and new home sales.