Investing.com - U.S. oil futures dropped on Friday, as expectations for a December rate hike by the Federal Reserve continued to lend broad support to the greenback and as supply glut worries weighed.
U.S. crude futures for January delivery were last at $41.45 a barrel, down 0.66% for the day.
On the ICE Futures Exchange in London, the January Brent contract were steady at $44.20 a barrel.
The dollar remained broadly supported after the minutes of the Federal Reserve's October meeting showed on Wednesday that a majority of board members are in favor of a December rate hike.
"While no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting," the minutes said.
Upbeat U.S. economic reports released on Thursday added to expectations for a U.S. rate hike before the end of the year.
The U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending November 14 declined by 5,000 to 271,000 from the previous week’s total of 276,000.
Separately, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 1.9 this month from October's reading of -4.5.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.32% at 99.40, re-approaching Wednesday's seven-month high of 99.96.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Oil prices also weakened after the U.S. Energy Information Administration said Wednesday that crude oil supplies rose by 252,000 barrels last week, disappointing market players who had hoped for a modest decline.
The oil market has been on the defensive in recent months amid uncertainty about how quickly the global glut of crude is set to shrink.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
OPEC will meet on December 4 to decide whether to extend their strategy of defending market share by keeping production high.