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Oil choppy, dips on strong dollar, prospect of Iran exports
[NEW YORK] Crude oil prices slipped in choppy trading on Friday, heading for a third week of losses and feeling pressure from a stronger dollar and expectations of increased exports from Iran.
The dollar headed for its biggest weekly rise since May and traded near a seven-week high against a basket of currencies after being lifted on Thursday by lower U.S. jobless claims.
Brent front-month September crude was down 23 cents at $56.69 a barrel at 11:29 a.m. EDT (1529 GMT), off more than 3 per cent for the week and more than 10 per cent for the month.
Brent's August contract expired on Thursday.
US August crude, also known as West Texas Intermediate (WTI), was down 53 cents at $50.38, down more than 4 per cent this week and 15 per cent in July. The August contract expires on July 21.
"WTI selling is continuing off of dollar strengthening," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a research note.
Iran has started to ship oil to Asia that it had been storing offshore for months after Tehran and six world powers reached an agreement about Tehran's nuclear program on Tuesday, clearing the way for an easing of international sanctions on Iran. "With the Iran deal, people are aware there is more supply coming so all impetus for a price correction higher has gone," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
Britain's North Sea Buzzard oilfield ramped up after an outage that started on Wednesday night. The outage was supportive to Brent as oil from the field contributes to the calculation of the benchmark's price.
US RBOB gasoline futures held on to gains on Friday, supported by recent government data showing strong gasoline demand in the United States.
Thursday's news of dropping US jobless claims was supportive to gasoline futures, even as a string of economic data pointing to a firming economy bolster the case for the Federal Reserve to raise interest rates, a move seen as bearish for crude futures as it could curb liquidity.
Even with Friday's strength, gasoline futures were on track to post a more than 5 per cent loss for the week, the biggest since mid-March and the fifth consecutive weekly drop.