Investing.com - Crude oil futures tumbled over 1% on Friday, moving closer to a seven-month low as data showing that U.S. economic growth accelerated in the second quarter added to expectations for a rate hike later this year and sent the dollar broadly higher.
On the New York Mercantile Exchange, crude oil for September delivery hit $47.74 during European early afternoon hours, down 77 cents, or 1.60%. A day earlier, Nymex oil prices lost 27 cents, or 0.55%, to end at $48.52.
Oil weakened further after the Commerce Department reported on Thursday that U.S. gross domestic product expanded at an annual rate of 2.3% in the three months to June. First quarter growth was revised up to 0.6% from a previously reported contraction of 0.2%.
Although economists had forecast growth of 2.6% the report still indicated that the economy is on a solid footing.
The data came after the Fed said in its rate statement on Wednesday that the economy and the labor market had continued to strengthen, reinforcing expectations for an initial rate hike at its September meeting.
Fed officials said they felt the economy had recovered from a first-quarter slowdown and was now "expanding moderately."
Fed Chair Janet Yellen has said the central bank could raise rates as soon as September if the economy continues to improve as expected.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.46 in European afternoon trade, close to Thursday's one-week high of 97.89.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery dropped by 49 cents, or 0.91%, to trade at $52.82 a barrel. On Thursday, London-traded Brent futures lost 7 cents, or 0.13%, to settle at $53.31.
The spread between the Brent and the WTI crude contracts stood at $5.08 a barrel.