Investing.com - Crude oil futures dropped on Friday, as the previous session's downbeat U.S. data sparked concerns over the strength of the economy and markets awaited the release of U.S. inflation data later in the day.
On the New York Mercantile Exchange, crude oil for July delivery hit $60.20 during European early afternoon hours, down 53 cents, or 0.90%. A day earlier, Nymex oil prices rallied $1.74, or 2.95%, to end at $60.72.
On Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 16 rose more than expected by 10,000 to 274,000 from the previous week's total of 264,000.
Separately, the National Association of Realtors said that existing home sales fell unexpectedly by 3.3% in April to 5.04 million units from the previous month's revised total of 5.21 million units.
In addition, the Federal Reserve Bank of Philadelphia said that its manufacturing index declined to 6.7 this month from a reading of 7.5 in April, confounding expectations for a rise to 8.0.
Investors were now looking ahead to U.S. inflation data and a speech by Federal Reserve Chair Janet Yellen due later in the day for fresh indications on how the economy is performing.
U.S. oil futures have been well-supported in recent weeks as an ongoing collapse in rigs drilling for oil in the U.S. added to expectations that shale oil production has peaked and may start falling in the coming months.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 8 last week to 660, the 23rd straight week of declines and the lowest level since September 2010.
Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
But market analysts also warned that the recent rally in the oil market could prompt some producers to dial up their output if prices hold above more than $60 a barrel.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery lost 69 cents, or 1.04%, to trade at $65.85 a barrel. On Thursday, London-traded Brent futures advanced $1.51 cents, or 2.32%, to settle at $66.54.
The spread between the Brent and the WTI crude contracts stood at $5.65 a barrel.