Investing.com -- Crude futures fell sharply on Friday extending losses from one session earlier, as U.S. rigs counts continued its long, steady decline.
On the New York Mercantile Exchange, WTI crude for July delivery fell 0.85 or 1.40% to $59.92 a barrel. Texas Long Sweet futures traded in a tight range of $59.75 and $60.65 on the final day of trading this week. Despite the losses over the last two sessions, WTI crude still ended the week up by more than 2% after spiking by more than $2 a barrel to close Wednesday's session near $61.50 a barrel.
On the Intercontinental Exchange (ICE), brent crude for July delivery dipped 1.31 or 2.01% to 63.80 a barrel. Brent futures also traded in a tight range between a session-low of 63.79 and a peak of 64.97. The spread between the international and U.S. domestic benchmarks of crude stood at 3.88, below Thursday's level of 4.33.
Oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count that U.S. oil rigs fell by seven last week to 635, its lowest level since August, 2010. It marked the 27th consecutive week of weekly declines. Although the rig count is down sharply from its peak above 1,600 during the fall, the pace of decline has slowed significantly over the last several months. Crude futures remained relatively unchanged after the release of the weekly report in U.S. afternoon trading.
The report came one day after the International Energy Association (IEA) upwardly revised its global demand forecasts for the year as a whole. In a closely-watched report, the IEA said global demand for crude will increase by 1.4 million barrels of day in 2015, a rate approximately 300,000 bpd faster than previous forecasts. The increase could push demand to 94 million bpd, above 2014 levels of 92.6 million bpd.
In addition, the IEA said OPEC production increased on the month to 50,000 bpd to 31.33 million bpd, amid record output by Saudi Arabia, Iran and the United Arab Emirates. Currently, global supply hovers around 96 million bpd a level approximately 3.0 million bpd higher than last year at this time.
Crude futures are down roughly 40% since peaking above $100 a barrel last summer. In November, OPEC roiled global markets by keeping its production ceiling unchanged – a policy the world's largest cartel reiterated last week when it decided to maintain output above its target supply level of 30 million bpd. It is widely believed Saudi Arabia, the world's largest exporter, devised the strategy in an effort to undercut U.S. shale producers by depressing the price of crude.
While shale producers have been forced to slow output at the lower prices, some industry observers have been enamored with their ability to drill more efficiently during the downturn.
"The shale oil industry is resilient and flexible – just as it can be pushed out of the market by very low prices, it can promptly get back into the market when prices improve," George L. Perry, a senior fellow in Economic Studies at the Brookings Institute wrote in a Fortune editorial. "An extended attempt by OPEC to close down the shale industry is a lose-lose situation, and as such is very unlikely to happen."
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached a session-high of 95.67, before falling to 94.92 -- down 0.06% on the session.