Oil steady in volatile session, down 2 percent for the week

Fri Aug 26, 2016 3:16pm EDT
 
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices were largely unchanged on Friday in a volatile session, as traders reacted to comments from Fed Chair Janet Yellen and reports of missile activity in Saudi Arabia.

The market was taking its cues from the movement in the dollar, which has been choppy following Yellen's remarks.

At one point, crude benchmarks were up as much as 2 percent before drifting lower. Brent crude futures settled at $49.92, up 25 cents or 0.5 percent. U.S. crude ended the session 31 cents higher at $47.64.

Prices gathered support briefly from Baker Hughes data showing that U.S. oil drillers kept rig count steady after eight weeks of additions.

The market was primed to react to Yellen's speech in Jackson Hole, Wyoming, as her remarks initially caused a big rally in the dollar, which caused oil to slip. Later, the dollar pared those gains, with the dollar index at one point down as much as 0.5 percent. It was later up 0.8 percent.

Oil prices touched the day's highs after reports of Yemeni missiles hitting Saudi Arabia's facilities, traders said. Saudi state TV reported that a projectile fired from Yemen hit a power relay facility in Najran, in the southern part of Saudi Arabia.

Sal Umek, senior analyst at the Energy Management Institute in New York, said he did not see much effect on the market from the Saudi Arabia reports.

"At the end of the day, what is driving the market right now is short covering, being that it's Friday and the dollar," he said.   Continued...

 
A fuel pump assistant stands next to an old fuel pump during the early hours near the village of Salwa at the Qatari-Saudi border, south of the eastern provience of Khobar, Saudi Arabia January 29, 2016. REUTERS/Hamad I Mohammed