Oil down as dollar offsets China move; glut hits prompt U.S. crude
By Barani Krishnan
NEW YORK (Reuters) - Oil fell on Friday, erasing early gains as traders dismissed a rate cut by China to focus on a surging dollar and weaker spot prices for U.S. crude as a glut weighed on prompt supplies.
A rally in U.S. stocks, however, bolstered risk appetite across financial markets, limiting the downside in oil. [.N]
Brent crude oil was down 21 cents at $47.87 a barrel by 1:27 p.m. EDT, after falling as much as 63 cents earlier.
U.S. West Texas Intermediate (WTI) crude was down 70 cents, or 1.5 percent, at $44.68, after hitting a three-week low at $44.20.
Both Brent and WTI have lost about 5 percent on the week, sliding for a second straight week.
Earlier on Friday, oil prices rose about 1 percent on expectations the Chinese rate cut might prompt the No. 1 energy consumer to import more oil.
Gains, however, faded as the dollar index hit two-month highs, making oil, copper and a host other commodities, less affordable for holders of other currencies.
"It's terrible price action considering China's rate cut," said Scott Shelton, energy broker and commodities specialist for ICAP in Durham, North Carolina. "It shows this is not the solution the market is seeking for crude demand." Continued...