Oil dips but notches fourth straight monthly gain

Tue May 31, 2016 4:44pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices dipped on Tuesday as a stronger dollar and slide in equity prices sparked profit-taking, but crude futures posted a fourth straight monthly gain as investors bet that the global glut was slowly easing.

Crude futures had gained early in the session, with investors expecting higher U.S. fuel demand as peak driving season arrived in the No. 1 oil consumer.

Caution ahead of weekly U.S. crude inventory data kept investors from pushing prices toward seven-month highs above $50 a barrel. The dollar's rise and slide in Wall Street stocks in afternoon trade eventually tipped oil into the negative zone.

Brent crude futures for July LCON6 settled down 7 cents at $49.69 a barrel before expiring as the spot contract. August Brent LCOQ6, the market's spot contract from Wednesday, finished down 47 cents, or nearly 1 percent, at $49.89.

U.S. crude's West Texas Intermediate (WTI) futures for July CLc1 settled at $49.10, down 23 cents, or 0.5 percent, from Friday's settlement. U.S. financial markets were closed on Monday for the Memorial Day holiday.

For the month, Brent rose 3 percent and WTI gained 7 percent.

"The dollar's strength and the weakness in equities hit crude on the day," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. "Plus, $50 remains a psychological target to cross, with caution playing ahead of the EIA data."

The dollar .DXY gained as strong U.S. consumer spending data fed expectations of a rate hike in coming months.   Continued...

 
A pumpjack drills for oil in the Monterey Shale, California, April 29, 2013.   REUTERS/Lucy Nicholson