Oil slips as dollar strengthens but traders eye Nigerian outages

Fri May 13, 2016 12:01pm EDT
 
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices slipped on Friday, ending a three-day rally, as a strong dollar weighed and investors cashed in on recent gains, but losses were cushioned by outages in Nigeria that have slashed output to the lowest in over two decades.

The dollar .DXY was at a more than two-week high against a basket of currencies, weighing on greenback-denominated commodities such as oil futures and making fuel imports more expensive for countries using other currencies and potentially hitting demand. [USD/][FRX/]

OPEC pumped 32.44 million barrels per day (bpd) in April, it said in a monthly report citing secondary sources, up 188,000 bpd from March. This is the highest since at least 2008, according to a Reuters review of past OPEC reports.

The group signalled the global oil glut may increase this year as surging output from its members makes up for losses from other countries whose production has been hit by low prices.

Prices were also pressured as investors locked in profits as oil headed for its fifth week of gains in the last six weeks and ahead of a long weekend in several countries in Europe, including Germany and France.

Brent crude futures LCOc1 were down 20 cents at $47.88 a barrel by 11:57 a.m. ET (1557 GMT). U.S. West Texas Intermediate crude futures CLc1 fell 43 cents to $46.27.

"The market sentiment remains biased to the upside supported by a growing view that the global oil complex is already in a rebalancing pattern," Dominick Chirichella, senior partner at the Energy Management Institute in New York.

The markets were boosted earlier after Exxon Mobil Corp (XOM.N: Quote) declared force majeure on exports of Nigeria's largest crude grade as a portion of production had been curtailed following damage to a pipeline by a drilling rig.   Continued...

 
A worker grabs a nozzle at a petrol station in Tehran, Iran January 25, 2016. REUTERS/Raheb Homavandi/TIMA