U.S. oil prices slipped from a six-month high Thursday on a stronger dollar and concerns about a continued global glut of oil.
Light, sweet crude for July delivery settled down 66 cents, or 1.1%, to $60.77 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 59 cents, or 0.9%, to $65.11 a barrel on ICE Futures Europe.
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Oil futures have traded in a tight range in recent weeks, as investors weigh the current oversupply of the commodity against growing demand and a decline in drilling that is expected to lead to lower production.
The dollar rose against other major currencies Thursday as U.S. data pointed to an improving economy. A stronger dollar makes oil, which is priced in dollars, more expensive for holders of other currencies.
Traders also digested a closely watched monthly report from the International Energy Agency, which said that global oil supplies will continue to exceed demand this year.
Though the agency raised its estimate for 2015 oil-demand growth by 300,000 barrels a day to 94 million barrels a day, the IEA also said that supply growth will remain strong. The agency raised its expectation for supply growth outside the Organization of the Petroleum Exporting Countries by 195,000 barrels a day. OPEC, a group of oil-producing nations, is currently producing about a million barrels a day above its target of 30 million barrels a day.
"This is a market that's becoming increasingly frustrating for both bulls and bears, because it's very tightly rangebound and there are good arguments on both sides for why prices should go up or down," said Bill O'Grady, chief market strategist at Confluence Investment Management. "We're going to be stuck in this for a while."
On Wednesday, the U.S. Energy Information Administration reported that U.S. oil output continued to grow last week, reaching 9.6 million barrels a day, the highest level in more than 40 years. Current high levels of U.S. production have surprised many market watchers, who expected output to start falling earlier this year.
"The downside risk here is that we have a larger surplus than anticipated, and one that is going to persist larger than anticipated," said Tim Evans, analyst at Citi Futures.
Gasoline futures fell 0.83 cent, or 0.4%, to $2.1381 a gallon. Diesel futures fell 2.49 cents, or 1.3%, to $1.9210 a gallon.
(By Nicole Friedman)