Brent Set For Weekly Loss

Brent crude oil looked poised to post a weekly loss on Friday after losing some ground on Thursday due to a stronger dollar and rising global supply. The commodity traded at $101.79 at 6:30 GMT on Friday morning.

The dollar saw a massive boost on Thursday following the European Central Bank’s decision to lower its interest rate and introduce a new easing package.

Investors were not expecting the bank to be so aggressive, so it was a surprise when bank President Mario Draghi announced that he and his colleagues had elected to take the ECB’s interest rate to a record low 0.05 percent. Since Brent crude oil is priced in dollars, the greenback’s rise hurt the commodity’s prices.

Related Link: ECB Decision Boosts ETFs

Oil prices found some support from US data which showed that then nation’s crude inventories had fallen by 905,000 barrels last week. The data, released on Thursday by the Energy Information Administration, confirmed that the number one oil consuming nation’s crude appetite was on track.

Brent also found support from news that Iraqi oil exports have declined as the region’s conflict worsens. CNBC reported that the nation’s Kirkuk supplies have fallen to 30,000 barrels per day since June, compared to 300,000 bpd in February.

The slump is largely due to the Islamic State fighters who have taken over much of the region and targeted oilfields and pipelines.

However, new supplies will likely be introduced next week as the North Sea’s Buzzard oilfield has restarted following scheduled maintenance and is expected to increase production next week. The oilfield is one of the key drivers for Brent prices, so its return to capacity will likely drive prices even lower.