U.S. crude tumbles 5 percent; Wall Street selloff offsets rig data
By Barani Krishnan
NEW YORK (Reuters) - Oil prices tumbled on Friday, with U.S. crude falling 5 percent, after a selloff in Wall Street equities offset the positive impact of 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.
U.S. crude futures' front-month settled down $2.22, or 4.8 percent, at $44.68 a barrel.
The front-month in Brent, the global oil benchmark, fell $1.61, or 3.3 percent, at $47.47.
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 of the rig count, a sign that a renewed fall 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 before the Baker Hughes report, 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.
Shortly after the rig count report, oil prices began a sharper descent as Wall Street's key S&P 500 stock index .SPX headed for its biggest rout since the start of September. The dollar also rebounded from a 3-week low hit earlier in the day after a Federal Reserve decision to keep interest rates unchanged. Continued...