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Brent crude futures settled at $79.87 per barrel, down $1.49, or
1.8%, while the U.S. West Texas Intermediate crude futures fell
$1.47, or 1.9%, to settle at $75.42 a barrel.
"It just appears to be some profit taking, with some demand
concerns coming back to the front and center as the dollar
rebounds," said John Kilduff, partner at Again Capital.
The U.S. dollar index edged higher after hitting a 15-month low
during the session, as investors consolidated ahead of the
weekend. A stronger greenback reduces oil demand, making crude
more expensive for investors holding other currencies.
Next week, however, the rally could resume as easing inflation,
plans to refill the U.S. strategic reserve, supply cuts and
disruptions could support the market, said Rob Haworth, senior
investment strategist at U.S. Bank Wealth Management.
"While oil prices are likely slightly overbought in the very
near term, touching the highest levels since early May, the bias
appears to be for a grind higher," Haworth said.
Oil prices gained nearly 2% on a weekly basis, after supply
disruptions in Libya and Nigeria heightened concerns that the
markets will tighten in coming months.
Several oilfields in Libya were shut down on Thursday because of
a local tribe's protest against the kidnapping of a former
minister. Separately, Shell suspended loadings of Nigeria's
Forcados crude oil owing to a potential leak at a terminal.
The Libya disruption is halting an estimated 370,000 barrels per
day (bpd) while the loss from the Nigerian outage is pegged at
225,000 bpd, said PVM analyst John Evans.
Russian oil exports have also decreased significantly and, if
this trend continues next week, it would probably drive prices
up further since Russian oil exports are set to be reduced by
500,000 bpd in August, added Commerzbank analysts.
(Reporting by Shariq Khan in Bengaluru; Additional reporting by
Natalie Grover in London, Sudarshan Varadhan in Singapore and
Katya Golubkova in Tokyo; Editing by Louise Heavens, David
Gregorio, Mark Potter and Deepa Babington)
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