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NEW YORK (Reuters)-the price of Brent crude fell 2 percent on Friday as Europe's debt problems and a bounce in the dollar index extended the decline of oil, a day after consuming Nations announced that they were touching on strategic reserves.
7 percent drop for the week, premium to Brent crude fell under U.S. $ 14 a barrel, down $ 19 intraday on Wednesday, the day before the International Energy Agency made a surprise announcement to release oil from strategic reserves. The prize has contracted from his record $ 23.34 reached 15 June.
U.S. crude oil ended slightly higher Friday, after seesawing and briefly dipping below $ 90 a barrel, finding support on trade lower on Thursday.
The euro fell on the dollar as investors worried that the Parliament of Greece cannot pass austerity measures necessary for the country secure more funding.
"The strengthening of the dollar index is helping the oil pressure and we are seeing an unwinding of Brent-WTI spread due to the release of strategic reserves," said Phil Flynn, an analyst at PFGBest research in Chicago.
"The spread of WTI-Brent arrive indicates that the issue was warranted," he added.
ICE Brent crude for August fell $ 2.14 to settle at $ 105.12 per barrel, after swinging between $ 103.62 and $ 108.70 after slide almost 6 percent of the previous session. He was a second straight losing week for the contract.
Brent trading volumes were heavy, eclipsing U.S. crude for a second straight day, after hitting a record a lot of over 1.2 million Thursday.
Nations reserves that require release Brent sent in contango, with front-month Brent, ending with a discount of 19 cents for the contract in September, after closing Thursday at a premium 21 cents for the second month.
Raw cut 14 August U.S. cents to settle at $ 91.16 a barrel, but the front-month crude posted a third straight losing week, a decrease of 2 percent.
Money managers reduced their U.S. crude futures network and long positions of options in both New York and London the week to June 21, the Commodity Futures Trading Commission said on Friday.
Relative strength index for crude oil Brent both U.S. approached the mark of 30 points, a signal that a contract has been oversold following the announcement of the IEA, sell off although WTI cut slightly up after the rally to end-of-day price.
U.S. gasoline Futures settled lower, losing 2.1%, with the benchmark oil, distilled, 1.1 percent less heating.
U.S. refined product prices were reacting to more costly futures Brent crude over the past few months.
IEA RESERVE RELEASE IMPACT
The International Energy Agency (IEA) announced Thursday a statement of 60 million barrels of government stocks for the next 30 days.
Main commodities banks JP Morgan and Goldman Sachs cut their oil price forecasts, after the announcement of the IEA, but the Bank of America Merrill Lynch maintained its forecast for the second half unchanged at $ 102 per barrel.
Saudi Arabia, the leading exporter of crude oil in the world, has yet to make any comment on the release.
The IEA's move came after the Organization of petroleum exporting countries last month, could not reach an agreement on a Boost to production targets. But Saudi Arabia had promised to increase production to meet demand.
"Saudi Arabia will be crucial-will stick to its promise to increase its output to 10 million barrels per day or not?" said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.
"If not, then deciding to AIE will have failed. Maybe they will scale back production in July after this release stock. "
The United States Treasury Secretary Timothy Geithner said on Friday that the IEA decision was "reasonable politics".
"Will provide some modest help and relief" for the u.s. economy, Geithner told reporters after meeting with local business owners in Manchester, New Hampshire. "It was a prudent use of existing reserves."
Durable goods data of United States better than expected given support to U.S. crude futures in the early going Friday.
New orders for Us manufactured goods in may increased 1.9 percent after dropping the 2.7 per cent in April, the Commerce Department said.
But concerns over the eurozone debt concerns continued to weigh on the markets. U.S. stocks headed for three days of losses as concern about the Italian added the uncertainty over the passage of a Greek austerity plan in the banking sector. (.N)
(Additional reporting by Gene Ramos in New York, Claire Milhench and Ikuko Kurahone in London and Alejandro Barbajosa in Singapore; Editing by Lisa Shumaker and David Gregory)
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