A Torc Oil & Gas pump jack is seen near Granum, Alberta, Canada on May 6 2020. REUTERS/Todd Korol/File Photo/
A Torc Oil & Gas pump jack is seen near Granum, Alberta, Canada on May 6 2020. REUTERS/Todd Korol/File Photo/

Singapore — Oil prices fell on Monday, extending losses from Friday after the US dollar jumped to a three-week high and the US rig count rose, though nearly a quarter of US Gulf of Mexico output remained offline in the wake of two hurricanes.

Brent crude futures fell 48c, or 0.6%, to $74.86 a barrel at 6.10am after losing 33c on Friday.

US West Texas Intermediate (WTI) crude futures fell 55c, or 0.8%, to $71.42 a barrel, after declining by 64c on Friday.

“Strength in the USD over the last couple of days has provided some headwinds to the market,” researchers at ING Bank said in a note on Monday.

Oil fell with the greenback near a three-week high after a rally on Friday on better-than-expected US retail sales data. That bolstered expectations the US Federal Reserve will begin reducing asset purchases later this year.

“WTI crude may consolidate over the next few trading sessions until the trajectory of the dollar is a little clearer,” Oanda analyst Edward Moya said in a note.

ING said that a tapering announcement this week is “likely [to] put some downward pressure on oil and the broader commodities complex”, though it added such an announcement is more likely in November.

A stronger greenback makes US dollar-priced oil more expensive for holders of other currencies, curtailing demand.

A rise in the US rig count also kept a lid on oil prices. The oil and gas rig count rose by nine to 512 in the week to September 17, its highest since April 2020 and double the level from this time last year, Baker Hughes said on Friday.

As of Friday, 23% of US Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement reported.

Reuters

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