Oil down on stronger greenback, rising US rig count

[MELBOURNE] Oil prices fell on Monday, extending losses from Friday after the US dollar jumped to a three-week high and the US rig count rose, although nearly a quarter of US Gulf of Mexico output remained offline in the wake of two hurricanes.

US West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.4 per cent, to US$71.67 a barrel at 0059 GMT, after declining by 64 cents on Friday.

Brent crude futures fell 27 cents, or 0.4 per cent, to US$75.07 a barrel after losing 33 cents on Friday.

Oil fell with the greenback near a three-week high following a rally on Friday on better-than-expected US retail sales data. That bolstered expectations the US Federal Reserve will begin reducing asset purchases later this year.

"WTI crude may consolidate over the next few trading sessions until the trajectory of the dollar is a little clearer," Oanda analyst Edward Moya said in a note.

A stronger greenback makes US dollar-priced oil more expensive for holders of other currencies, curtailing demand.

A rise in the US rig count also kept a lid on oil prices.

The oil and gas rig count rose by nine to 512 in the week to Sept 17, its highest since April 2020 and double the level from this time last year, Baker Hughes said on Friday.

As of Friday, 23 per cent of US Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement reported.

REUTERS