Oil slips on U.S. economy concern, Brent holds near $50

Fri Jun 3, 2016 12:49pm EDT
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices dipped on Friday on concerns about the U.S. economy, but Brent crude held close to $50 a barrel in choppy trading with support from a weaker dollar and relief that most OPEC members do not plan to flood the market with excess crude.

Weaker-than-expected U.S. non-farm payroll data sent the dollar index to its lowest since mid-May, which also supported crude prices. A weaker dollar makes oil cheaper for holders of other currencies.

But the numbers were negative for the U.S. economy which could limit energy demand, leading to the "push-pull" in the oil market, traders and brokers said.

The weak data raises concerns about U.S. gasoline demand this summer driving season, said Bob Yawger, director of the futures division at Mizuho in New York.

Brent crude futures LCOc1 dipped 8 cents to $49.96 per barrel by 12:21 p.m. ET. Brent's price still remained almost double January lows, on track for its eighth weekly gain in nine weeks.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 17 cents at $49, on track for its first weekly decline in four weeks.

Oil prices have rallied from this winter's lows due largely to supply disruptions, particularly in Nigeria, Venezuela, Libya and Canada. On Friday, militants in the restive Niger Delta region that produces more than half of Nigeria's oil claimed three new attacks on oil infrastructure, promising to bring the country's oil production to "zero."

Still, news that ExxonMobil lifted its force majeure on exports of Nigeria's Qua Iboe crude oil, looked likely to bring barrels back to the market.   Continued...

An oil pump jack can be seen in Cisco, Texas, August 23, 2015. REUTERS/Mike Stone