U.S. crude oil snapped a three-day gain to end lower on Friday, as the dollar trended higher and notwithstanding some upbeat global economic data. Crude oil was also impacted on reports that crude shipments from Iraq touched a record high, with the output from Organization of the Petroleum Countries at its highest since late 2012. With the greenback rising, crude oil prices paused after strong recent gains on the back of a weak dollar.
For the week, crude oil gained about 3.5 percent.
Traders are calling it a technical breakout helped by tensions in the Middle East, where Yemen's civil war has become a proxy fight between Iran and Saudi Arabia. In any case, a massive build in global stockpiles has failed to dent prices of late.
Crude oil shipment from Iraq scaled a 30-year high, with shipments touching about 31.1 million barrels in April. Meanwhile, OPEC as a whole also continued to pump oil at a very high rate, touching record levels, adding to the supply glut.
The U.S. Energy Information Administration's weekly report on Wednesday showed. U.S. commercial crude inventories to have increased by 1.9 million barrels last week, maintaining a total U.S. commercial crude inventory of 490.9 million barrels.
In some upbeat data, economic activity in the U.S. manufacturing sector continued to expand in April with consumer sentiment in the U.S. also improving in April. However, U.S. construction spending in March decreased unexpectedly.
Elsewhere, manufacturing sector in China continued expand slightly in April, while the manufacturing sector in Japan slipped into contraction for the first time in nine months. Meanwhile, British manufacturing activity unexpectedly eased sharply to a seven-month low in April amid weaker demand.
Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dropped $0.48 or 0.8 percent, to settle at $59.15 a barrel on the New York Mercantile Exchange Friday.
Crude prices for June delivery scaled a high of $59.90 a barrel intraday and a low of $58.32.
On Thursday, crude oil gained $1.05 or1.8 percent, to settle at $59.63 a barrel, on some upbeat jobless claims for unemployment benefits data from the U.S. with the dollar continuing to slide.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.27 on Friday, up from its previous close of 94.81 on Thursday in late North American trade. The dollar scaled a high of 95.40 intraday and a low of 94.50.
The euro trended lower against the dollar at $1.200 on Friday, as compared to its previous close of $1.1223 in North American trade late Thursday. The euro scaled a high of $1.1292 intraday and a low of $1.1177.
On the economic front, economic activity in the U.S. manufacturing sector continued to expand in April, a report from the Institute for Supply Management showed Friday, although the index of activity in the sector unexpectedly held steady.
The ISM said its purchasing managers index came in at 51.5 in April, unchanged from the previous month. While a reading above 50 indicates continued growth in the manufacturing sector, economists had expected the index to edge up to 52.0.
Consumer sentiment in the U.S. saw a modest improvement in April, a report from the University of Michigan said Friday. The consumer sentiment index for April came in at 95.9, unrevised from the mid-month reading and up from 93.0 in March. Economists expected the index to be upwardly revised to 96.0.
Partly reflecting a sharp pullback in spending on residential construction, a Commerce Department report showed an unexpected decrease in U.S. construction spending in March. Construction spending fell by 0.6 percent to annual rate of $966.6 billion in March from the revised February estimate of $972.9 billion. Economists expected construction spending to increase by about 0.5 percent.
The manufacturing sector in China continued to barely expand in April, data from the National Bureau of Statistics showed on Friday with a manufacturing PMI score of 50.1. That beat expectations for 50.0, and was unchanged from the March reading.
The manufacturing sector in Japan slipped into contraction for the first time in nine months, the latest survey from Markit Economics showed Friday with a revised manufacturing PMI reading of 49.9. This is up from last month's preliminary April reading of 47.7, although it is down from 50.3 in March.
British manufacturing activity unexpectedly eased sharply to a seven-month low in April amid weaker demand, while central bank data showed that consumer credit grew strongly, suggesting that the fragile economic recovery was largely being led by consumption.
Poor figures for the factory sector coupled with weaker-than-expected first quarter U.K. GDP may prove a severe blow to the Conservatives just days ahead of the May 7 election. The seasonally adjusted Markit/CIPS Purchasing Managers' Index fell to 51.9 in April from March's 54, which was revised from 54.4. Economists had expected the index to rise to 54.6.
U.K. mortgage approvals unexpectedly declined in March, after rising in the previous three months, data from the Bank of England showed Friday. The number of loan approvals for home purchase fell to 61,341 from a six-month high of 61,523 in February. Economists had expected an increase to 62,500.
