Oil rallies on U.S. rig count drop; dollar up seventh month
By Caroline Valetkevitch
NEW YORK (Reuters) - Oil prices rallied on Friday following the sharpest weekly drop in U.S. oil rig count in nearly 30 years, while the dollar index ended January with its longest run of gains since the greenback was floated in 1971.
U.S. stocks finished the day down more than 1 percent as data showed U.S. economic growth slowed sharply in the fourth quarter.
Major U.S. stock indexes posted losses for the week and month, with the declines driven by falling oil prices and concern about weak overseas demand. The S&P 500 was down 3.1 percent for January, its biggest monthly slide since January 2014.
In a rally that may spur speculation that a seven-month price collapse has ended, U.S. crude futures CLc1 jumped 8.3 percent to settle at $48.24 a barrel and Brent crude LCc1 shot up 7.9 percent to settle at $52.99, its biggest one-day gain since 2009. Sparking the rally was data that showed drillers were cutting back on shale activity.
European stocks ended lower, but registered their biggest monthly gain in three years.
The U.S. dollar index .DXY advanced for a seventh straight month in January, marking the longest streak of monthly gains since the greenback was floated in 1971. It was up 5.0 percent for January, but off 0.1 percent for the day.
Weighing on stocks and the dollar, U.S. gross domestic product expanded at a weaker-than-expected 2.6 percent annual pace after the third quarter's spectacular 5 percent rate, the Commerce Department said in its first snapshot of fourth-quarter GDP.
The headline number was "well below consensus expectations and that is definitely one of the data points that many bulls were looking for to justify staying bullish," said Peter Kenny, chief market strategist at Clearpool Group in New York. Continued...