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Oil down on stronger greenback, rising U.S. rig count By Reuters


© Reuters. FILE PHOTO – Crude oil storage tanks can be seen above the Cushing Oil Hub in Cushing (Oklahoma), March 24, 2016. REUTERS/Nick Oxford/File Photo

MELBOURNE (Reuters) – Oil prices fell on Monday, extending losses from Friday after the U.S. dollar jumped to a three-week high and the U.S. rig count rose, although nearly a quarter of U.S. Gulf of Mexico output remained offline in the wake of two hurricanes.

U.S. West Texas Intermediate crude oil futures dropped 30 cents or 0.4% to $71.67 per barrel at 0059 GMT. This follows a drop of 64 cents Friday.

After losing 33 cents Friday, futures dropped 27 cents or 0.4% to $75.07 per barrel.

The greenback gained ground on Friday, as oil fell near its three week high. It was boosted by better-than-expected U.S. Retail Sales data. The U.S. Federal Reserve is expected to reduce its asset purchase later in the year, as this bolstered market expectations.

OANDA analyst Edward Moya wrote in a note, “WTI crude might consolidate over the coming trading sessions until the trajectory is a little clearer.”

Holders of foreign currencies will find oil that is priced at the U.S. dollar more expensive due to a stronger greenback, which reduces their demand.

Oil prices were also held down by a rise in U.S. drilling activity. Baker Hughes stated that in the week ended Sept. 17th, the oil and natural gas rig count increased nine times to 512. This was the highest number since April 2020. It is also double what it was last year.

The Bureau of Safety and Environmental Enforcement stated that 23% of U.S. Gulf of Mexico’s crude oil output (or 422,078 barrels) remained closed as of Friday.

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