Oil prices fell Friday on the firming U.S. dollar as investors tracked the latest twists in the Greek debt negotiations and braced themselves for the looming deadline in the Iran nuclear talks.
Light, sweet crude for July delivery, the U.S. benchmark, lost 84 cents, or 1.4%, to $59.61 a barrel on the New York Mercantile Exchange. It finished the week down 35 cents, or 0.6%.
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The global Brent contract for August ended down $1.24, or 1.9%, at $63.02 a barrel on the ICE Futures Europe exchange. For the week, it lost $1.62, or 2.5%.
Oil markets Friday followed a common recent pattern of taking cues from moves of the dollar, even largely ignoring an updated count on the amount of oil drilling in the U.S., analysts said.
The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, spend most of Friday's session in positive territory. Oil is priced in dollars and becomes more expensive for holders of other currencies as the greenback appreciates. The dollar fell back to unchanged in the afternoon, and oil subsequently pared losses that had briefly pushed U.S. oil below $59 a barrel.
New data in the afternoon did show the U.S. oil-rig count fell by four to 631 in the latest week, according to Baker Hughes Inc., marking the 28th straight week of declines. The number of working U.S. oil rigs, a proxy for drilling and production, has fallen now about 61% since its peak in October.
The small cutback revealed Friday reaffirms a trend suggesting the most dramatic cutbacks are past, said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston. But that wasn't enough to jolt prices, he added.
"It wasn't any sort of seismic shift," Mr. Saucer said. "Today was another day that crude is just following the dollar-euro cross."
Analysts have said that the currency markets are too volatile for their run as the big driver of oil prices to end soon. There will likely at least need to be a deal over Greek debt for things to change, they have said.
"Over the next 14 days there is likely to be increasing risk tension regarding the Greek eurozone membership, which could help to drive risk aversion higher and potentially also the dollar stronger," said Bjarne Schieldrop, commodity analyst at SEB Markets. "This is likely to be bearish for Brent crude oil."
Eurozone leaders will try to clinch a deal on Greece's flailing bailout at a hastily called crisis summit on Monday, after finance ministers failed once again to bridge the gap between Athens and its lenders.
A Greek default could also hurt European oil demand, says Olivier Jakob of Petromatrix.
"Most of the European oil demand growth this year is coming from the southern countries of Europe. Therefore, if there was a Greek default and a contagion of a risk premium to other southern European countries it could have a negative impact on European oil demand," Mr. Jakob said.
Oil prices have moved within a narrow trading range in the past two weeks after a 40% spring rally ran out of steam, with market participants weighing signs of improving demand against the continuing global oversupply of crude.
In refined products, July gasoline ended down 5.15 cents, or 2.4%, at $2.0586 a gallon on the Nymex, while July diesel fell 4.83 cents, or 2.5%, to $1.8669 a gallon.
Angela Chen contributed to this article.
(By Tim Puko and Georgi Kantchev)