WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange eased Friday from three-month highs on profit taking amid holiday-thinned trading. West Texas Intermediate led the decline amid a strengthening U.S. dollar and sharp increase in the U.S. oil rig count.
The U.S. dollar reached a one-week high 97.35 in Friday's trading, weighing on WTI futures since oil trades globally in dollar denominations.
NYMEX WTI February contract fell $0.74 or 1.3% to a $60.44 per barrel (bbl) settlement, while posting a 0.6% increase on the week on a spot continuous basis. ICE February Brent shed $0.40 to settle at $66.14 bbl, while gaining a steeper 1.4% this week. Brent's premium to WTI futures reached a three-week high at $5.70 bbl.
NYMEX January ULSD futures ended down 0.77 cents at $2.0218 gallon although up 1.8% this week. January RBOB contract softened 0.10 cents to settle at $1.7058 gallon, while surging 2.6% on the week.
Baker Hughes Friday afternoon reported an 18 rig jump in the U.S. oil rig count to 685 during the week ended Dec. 20, the largest weekly increase since early February 2018. After seven consecutive weeks with a decline in the U.S. oil rig count through the first week of December, operators have deployed 22 rigs during the past two weeks, lifting the rig count to the highest point since late October.
Friday's lower settlements came despite bullish economic data released earlier in the session indicating robust growth in the world's largest economy. U.S. Bureau of Economic Analysis this morning reported gross domestic product grew 2.1% on an annualized basis in the third quarter, a 0.1% increase from the prior quarter's 2% expansion. The growth once again was driven by consumer spending, which jumped 3.2% from July to September, far exceeding market expectations for a 2.8% increase. Adding further support, University of Michigan's closely watched Consumer Sentiment Index increased 2.5 points to 99.3 in December -- the highest reading in seven months. Consumer sentiment index has now improved for four straight months.
According to analysis, consumer sentiment was partly lifted by easing trade tensions between the United States and China, with Washington and Beijing cancelling a fresh round of tariffs on one another's exports last Friday. Since then, China announced intentions for new large purchases of U.S. chemical and oil products and concessions on intellectual property laws, easing concerns that the country's leadership would not follow through on the agreement.
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