Oil ends down 1 percent, snapping week-long OPEC-fueled rally
By Barani Krishnan
NEW YORK (Reuters) - Oil fell about 1 percent on Friday as players took profits on a rally over the past week that propelled prices nearly 15 percent to four-month highs on hopes of OPEC crude output cuts.
Also weighing on the market was the steady rise in U.S. oil drilling as crude trades at or near $50 a barrel. A closely watched report by oil services provider Baker Hughes showed U.S. drillers adding rigs in 14 of the past 15 weeks. [RIG/U]
Brent crude LCOc1 settled down 58 cents, or 1.1 percent, at $51.93 a barrel. Earlier in the day, it hit $52.84 cents, three cents short of a one-year high.
U.S. West Texas Intermediate (WTI) crude settled down 63 cents, or 1.3 percent, at $49.81.
OPEC is "back in business," determining oil prices, and only a "brave person" would bet against the cartel, an avowed oil bull, Andy Hall, said in a letter seen by Reuters to investors in his $2.5 billion hedge fund Astenbeck.
Despite Friday's drop, Brent and WTI remain up more than 10 percent since the Organization of the Petroleum Exporting Countries wrong-footed many market participants eight days ago with its first production cut plan in eight years. For the week, Brent ended up 6 percent while WTI rose 3 percent.
But with prices appearing to have gained too much, too soon - the Relative Strength Index for Brent and WTI was at 69 on Thursday, just below the overbought level of 70 - there was pressure to liquidate. On Friday, Brent's RSI fell to 67 while WTI dropped below 58.
"This is certainly not a one-way trade and we're seeing the other side acting now," said Tariq Zahir at Tyche Capital Advisors in New York. Continued...