WTI crude closed below $ 42 on Friday, while brent crude closed under $ 45 Investing.com — futures fell more than 2% as the dollar approached near 12-month highs on a light day of trading following the Thanksgiving holiday.
On the New York Mercantile Exchange, WTI crude traded between $ 41.61 and $ 42.74 a barrel, before settling at 41.77, down 1.27 or 2.95% on the session. After jumping by more than $ 2 a barrel over the first two days of the week, U.S. crude futures ended the week of trading by falling back by more than 1% in each of the last two sessions. One week after slipping below $ 39 a barrel to test near six-year lows, WTI crude ended the week up by approximately 4%.
On the Intercontinental Exchange (ICE), brent crude futures wavered between $ 44.80 and $ 45.64 a barrel, before closing at $ 44.89, down 0.57 or 1.26% on the day. One day after halting a six-session winning streak, North Sea brent futures fell considerably for the second straight trading day. For the week, brent crude inched up by roughly 0.50%. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $ 3.12, above Thursday’s level of $ 3.03 at the close of trading.
Long-term concerns related to oversupply remained in focus ahead of next week’s pivotal OPEC meeting in Vienna. Earlier this week, Saudi Arabia sent indications that it could consider adjusting its price and production forecasts in an effort to stabilize global energy markets. Last November, OPEC rattled markets worldwide when it left its production ceiling above 30 million barrels per day. The position triggered an extended battle with U.S. shale producers for market share, flooding markets with a glut of oversupply. As a result, crude futures have slumped by more than 40% over the last year spending the majority of 2015 near lows not previously seen since the Financial Crisis.
Elsewhere, energy traders kept a close eye on geopolitical concerns in the wake of Turkey’s downing of a Russia fighter jet on the Syria border on Monday. Turkey president Tayyip Erdogan warned Russia not to play with fire on Friday, before adding that his nation did not want relations to suffer further harm. Turkey purchases approximately 60% of its from Russia, according to the Wall Street Journal, an amount that comprises a large chunk of the partners’ $ 30 billion a year trade pact.
Major geopolitical issues have taken center stage in the last two weeks since more than 120 civilians were killed in coordinated attacks in Paris on Nov. 13. The Islamic State claimed responsibility for the attacks in France, as well as an attack in Mali days later. In response, France, Russia and the U.S. have launched a series of air strikes at ISIS-controlled oil fields in Syria.
The , which measures the strength of the greenback versus a basket of six other major currencies, surged more than 0.3% to an intraday high of 100.26. The index is now points away from its 12-months high at 100.38 in mid-March. For a stretch of five sessions in mid-March the index remained near 100, before falling back when the Fed opted to leave short-term rates unchanged. Over the last year of trading, the index has spiked nearly 14%.
Dollar-denominated commodities such as crude become less expensive for foreign purchasers when the dollar depreciates.
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U.S. crude falls 2% amid stronger greenback, geopolitical considerations
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