U.S. Crude Falls on Worries About Glut, Brent Flat

Front-month expires Monday, long liquidation seen; dollar index highest in more than four years.

U.S. crude oil fell on Friday, on track for its fourth daily decline on continued concerns about ample supply at a time of weak global economic data and fragile demand.

Analysts and traders also cited some liquidation of long positions ahead of Monday's expiration of the front-month light-crude contract.

Brent crude hovered around $98 a barrel, as talk of possible OPEC production cuts kept the benchmark up from the 26-month lows reached at the start of the week.

Renewed strength in the U.S. dollar against major currencies also pressured oil. The dollar index hit its highest in more than four years, underpinned by an improved U.S. job market.. The Euro also reached a 14-month low vs the U.S. dollar.

"What we're seeing is a situation where everybody is concerned about the demand side of the equation and oversupply. Let's face it, the market is very heavy right now," said Phil Flynn, an analyst at Price Futures Group in Chicago. "The concerns previously about war and political risk have faded. (Also) With the Fed talking about raising interest rates, you're creating this huge upwards momentum in the dollar."

The stronger dollar has put a drag on oil markets as it makes commodities denominated in the U.S. currency more expensive for holders of other currencies.

U.S. crude was down $1.11 at $91.96 a barrel at 11:11 a.m. EDT (1511 GMT) while Brent was down 6 cents at $97.64 a barrel. Both contracts saw their biggest drop in more than two weeks on Thursday.

On Monday, Brent hit its lowest point since July 2012 as oil supply overwhelmed lackluster demand in Europe and Asia, with a glut of high-quality, light oil pushing North Sea crude for immediate delivery to big discounts below futures.

After the price slide, OPEC's secretary-general said he expected the cartel, which pumps around a third of the world's oil, to reduce production next year.

Libya's oil production has also been hit by conflict, curbing a sharp increase in output in recent months.

"It's quite difficult to find any bullish factors. The Chinese and European economies are weak and are putting on pressure," said Tetsu Emori, commodity fund manager at Astmax.

Weak home prices in China added to fears of a slowdown in the world's second-largest economy.

This week the Organization for Economic Cooperation and Development slashed its growth forecasts for major developed economies to 0.8 percent this year from 1.2 percent.

By Catherine Ngai