U.S. crude oil ended lower Friday on demand growth concerns, despite some recent upbeat economic data out of the U.S. and a bigger than expected decline in U.S. crude oil stockpiles last week. Renewed concerns of a slowdown in China and the resumption of oil shipments from Libya weighed on crude oil, with worries centered around an oversupply situation.
Investors mulled over Federal Reserve Chair Janet Yellen's warning on Friday that rate hikes could come sooner than expected if the U.S. economic recovery is sustained. She was speaking at the Fed's annual Jackson Hole symposium, addressing fellow central bankers.
However, Yellen also said the Fed's internal labor market indicators suggest the recent decline in the unemployment rate overstates the improvement in overall labor market conditions.
Fed members are engaged in a tricky debate over when to raise rates from near zero for the first time in six years. With the Fed charged with promoting maximum employment, the debate hinges on a thorough analysis of slack in the labor market, the subject of today's speech by Yellen.
The minutes of the Federal Reserve's recent policy meeting indicated some fierce debate over interest rates with some members favoring a hike sooner than earlier forecast.
Investors were also focused on developments in Ukraine and the Middle East. According to reports, a part of the Russian aid convoy has moved into Ukraine, even as the Ukrainian government has reportedly accused Russia for sending the convoy past the border without permission.
In Iraq, U.S. military reportedly launched fresh strikes against IS militants, despite threats from Islamic militants to kill another US reporter held by them.
Light Sweet Crude Oil futures for October delivery, the most actively traded contract, dropped $0.31 or 0.3 percent to close at $93.65 a barrel on the New York Mercantile Exchange Friday.
Crude prices for October delivery scaled a high of $94.04 a barrel intraday and a low of $92.92.
On Thursday, crude oil futures ended higher aided by a slew of upbeat U.S. economic data including reports showing a bigger than expected drop in jobless claims and a more than expected jump in existing home sales. Nonetheless, the gains were limited with some weak reading on Chinese manufacturing activity in August and on reports of oil shipments have resumed from Libya's largest terminal Es Sider.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.28 on Friday, up from its previous close of 82.16 late Wednesday in North American trade. The dollar scaled a high of 82.46 intraday and a low of 82.06.
The euro trended lower against the dollar at $1.3243 on Friday, as compared to its previous close of $1.3281 late Thursday in North American trade. The euro scaled a high of $1.3297 intraday and a low of $1.3222.
Speaking at the Jackson Hole Symposium, Federal Reserve Chair Janet Yellen said the central bank could go either way with regard to interest rates. Yellen said an increase in rates could come sooner than expected if the progress on inflation and the labor market occurred more rapidly than anticipated. At the same time, future calls on rates could be more accommodative in the event of a disappointing economic performance.
From Europe, U.K.'s house price sentiment index rose in August at the slowest pace in five months, results of a survey by Knight Frank and Markit Economics showed Friday. The house price sentiment index, an indicator of house price trends, dropped to 61.8 in August from 62.4 in July. However, a reading above 50 indicates that prices are rising. It was the seventeenth consecutive month of increase.
