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Oil prices ease on US dollar, higher shale output forecast
[SEOUL] Oil prices dipped slightly on Friday as the US dollar edged up from its overnight lows, while forecast higher production by US shale oil producers this year added to lingering worries over demand.
US crude futures for July shed 7 cents to US$60.38 a barrel as of 0009 GMT after closing up 53 cents in the previous session.
Brent crude for August fell 14 cents to US$64.12 a barrel, having settled up 39 cents on Thursday.
A firmer US dollar makes oil futures more expensive for holders of other currencies, while the potential for increased imports to the United States could also pressure US oil prices. "The narrowing of the Brent/WTI spread is improving the economics of imports rather than domestic purchases," ANZ said on Friday. It noted US rail volumes of crude oil and petroleum dropped 12 per cent year on year last week as higher imports slow purchases from regions such as North Dakota.
US shale oil producers have projected a rise in output for the year even as they have scaled back drilling to cope with a near 45 per cent slump in crude prices.
Saudi Arabia's Oil Minister Ali al-Naimi said after a meeting with Russian Energy Minister Alexander Novak he is optimistic about the coming months given increased global demand, Saudi state media reported.
Naimi also noted a reduction in the level of commercial stocks, and an improvement in prices.
Russia, the second biggest oil supplier to the global markets, and Saudi, the world's biggest oil exporter, plan to discuss a broad cooperation agreement at an economic forum in St Petersburg.
US consumer prices in May recorded their largest increase in more than two years as gasoline prices surged, suggesting the drag on inflation from lower oil prices was fading. Other data on Thursday showed the economy was regaining momentum after stumbling in the first quarter.
Euro zone leaders will hold an emergency summit on Monday to try to avert a Greek default after bank withdrawals accelerated and government revenue slumped as Athens and its international creditors failed to make any breakthrough on a cash-for-reforms agreement at talks in Luxembourg on Thursday.
Stock markets around the world rallied on Thursday.