Investing.com -- Crude slumped by more than 1% on Friday amid a soaring dollar, as the weekly U.S. oil rig count moved lower for a 10th consecutive period last week exacerbating concerns of oversupply on domestic energy markets.
On the New York Mercantile Exchange, WTI crude for December delivery traded in a range between $44.12 and $45.64 a barrel, before settling at $44.33, down 0.87 or 1.94% on the session. Following a gain of more than 3.8% on Monday, Texas Long Sweet futures have lost more than 1.85% in each of the last three sessions. After surging above $47 a barrel late last week, U.S. crude futures have lost approximately 5.5% in value.
On the Intercontinental Exchange (ICE), brent crude for December delivery wavered between $47.28 and $48.58 a barrel, before closing at $47.47, down 0.47 or 0.97% on the day. North Brent Sea futures have closed lower in five of six sessions in November. Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $3.14, above Thursday's level of $2.75 at the close of trading.
On Friday, oil services firm Baker Hughes (N:BHI) said in a weekly report that U.S. oil rigs fell by six to 572 for the week ending on Oct. 30. With the mild losses, oil rigs nationwide dropped to their lowest level since June, 2010. The current skid follows an extended losing streak earlier this year when the rig count decreased for a period of 25 straight weeks. During a brief impasse over the summer, U.S. oil rigs increased slightly for a six-week span before resuming the slump.
A significant reduction in the total oil rig level in the U.S. provides indications that nationwide crude production could be on the verge of falling sharply. Last week, U.S. crude output surged by 48,000 barrels to 9.16 million barrels per day, its highest level in nearly a month. A week earlier, crude output nationwide inched up 16,000 barrel to 9.112 million bpd. Crude production remains considerably below its level from this spring when it soared above 9.6 million bpd to reach its highest level in more than 40 years.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, shot up more than 1.25% to an intraday high of 99.47 on the back of a robust U.S. national employment report. In October, the U.S. economy added 271,000 nonfarm payrolls, its highest monthly gain since last December. The dollar index jumped to its highest level since mid-April.
Dollar-denominated commodities such as crude become more expensive when the dollar appreciates.