US Crude Falls, Down for Fifth Week
U.S. crude oil futures fell on Friday for a fifth straight week of declines while Brent remained under pressure from a stronger dollar and plentiful supplies despite an escalation of tensions between Russian and Ukraine.
Ukraine declared on Friday that Russia had launched a "direct invasion" of its territory after Moscow sent a convoy of trucks across the border into eastern Ukraine where pro-Russian rebels are fighting government forces.
"You'd think with increasing tensions between Russia and Ukraine, we'd be going up a bit, but the market maybe doesn't care as much about Russia because up until now, we haven't had any supply disruptions," said Phil Flynn, an analyst for the Price Futures Group in Chicago.
U.S. crude for October fell 31 cents to settle at $93.65 a barrel, paring earlier losses of more than $1 that brought U.S. crude to $92.92. On Thursday, U.S. crude dropped to $92.50, its lowest price since January.
It ended the week down 3.9 percent in a fifth straight week of losses, the longest streak of weekly drops since November 2013.
Brent fell 34 cents to settle at $102.29 a barrel in its second straight week of losses. Brent has fallen in six out of the past nine weeks as it beat a retreat from its June highs above $115.
Traders and analysts said higher inventory at Cushing, Oklahoma, pushed the markets lower Friday after stocks in the delivery point for the U.S. oil contract fell to six-year lows this month.
"I think the market is still reflecting on the big build in Cushing this week," said Dominick Chirichella, senior partner at Energy Management Institute. "I think we're (also) expecting another build this week."
Last week, crude stocks at the Cushing delivery hub rose by 1.8 million barrels to 20.2 million barrels, the first time stocks there topped 20 million in a month, data from the Energy Information Administration showed on Wednesday.
A rally in the U.S. dollar to just below its 2014 peak on Friday put downward pressure on oil as this makes dollar-denominated commodities more expensive for holders of other currencies.
Ample Supply
Friday's more modest declines followed hefty sell-offs this week that drove Brent to its lowest since June 2013.
The Brent market was trading in contango, where barrels trade more cheaply for the front month than those for delivery at future dates, with the October contract trading at a 78-cent discount to the November contract <LCOc1-LCOc2>.
Hedge funds, money managers and other large speculators cut their net long combined U.S. crude futures and options positions in New York and London for a fourth straight week, trimming long bets by 32,803 contracts to 201,933 during the period in the week to Aug. 19, the U.S. Commodity Futures Trading Commission said.
In Libya, oil production continued to increase after the reopening of several eastern ports. Officials have also loaded a second tanker at Es Sider, Libya's largest oil export terminal, after it was shut for a year.
Export volumes from Iraq remain near record levels despite an insurgency by Islamic State militants in the north. Crude is also being exported from Iraqi Kurdistan via Turkey in defiance of Baghdad.
(By Anna Louie Sussman; Additional reporting by Catherine Ngai in New York, Claire Milhench in London and Seng Li Peng in Singapore; Editing by Jessica Resnick-Ault, Bernadette Baum, James Dalgleish and Marguerita Choy)
