Oil down slightly on rising dollar, OPEC output
- Article by: The Associated Press
- Associated Press
- May 10, 2013 - 3:03 PM
NEW YORK - The price of oil finished slightly lower Friday, after dropping 3 percent earlier in the day.
Benchmark crude for June delivery slipped 35 cents to close at $96.04 a barrel on the New York Mercantile Exchange. It was as low as $93.37 in the morning.
Initially, a stronger dollar and rising OPEC production weakened support for oil, which fell as low as $93.37 a barrel. The increase in the afternoon corresponded with a move by U.S. stock markets into positive territory and a reversal of some of the dollar's gains.
Since oil is traded in dollars, a stronger dollar makes crude and other commodities less appealing to investors with other currencies. On Friday the euro fell to $1.2934 before coming back to $1.2985. That was still below the $1.3041 late Thursday in New York. Likewise, the dollar nearly hit 102 Japanese yen before slipping to 101.57. The dollar broke above 100 yen on Thursday for the first time since April 2009.
The Organization of Petroleum Exporting Countries said it produced 30.5 million barrels of oil a day in April, the most since November. The group said global supplies increased 450,000 barrels a day. Production from non-OPEC nations like the U.S. is also on the rise at a time when supplies are ample and mixed global economic data raise questions about demand.
OPEC said it expected global oil use to be "much higher" in the second half of the year, but warned that the struggles of the eurozone and possible lower growth in China could hurt demand.
Rising stocks may have encouraged oil buying. After trading lower in the morning, the Dow Jones industrial average and the Standard & Poor's 500 index showed small gains as oil trading closed. Stocks ended higher for the day and the week.
The national average for a gallon of gasoline rose a penny on Friday, to $3.56, its highest level in a month. It's about 4 cents higher than week ago, but 18 cents lower than the same time last year.
Brent crude, a benchmark for many international oil varieties, fell 56 cents to $103.91 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
_ Wholesale gasoline fell 2 cents to $2.86 a gallon.
_ Heating oil lost 3 cents to $2.91 a gallon.
_ Natural gas fell 7 cents to $3.91 per 1,000 cubic feet.
Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.
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