Oil extends losses as strong dollar weighs on commodities markets

A stronger greenback makes dollar-denominated commodities less attractive for holders of other currencies.

However, both benchmark crude contracts gained about 3% last week on signs of stronger oil products demand in the U.S., world’s largest consumer, and as OPEC+ cuts kept supply in check.

U.S. crude inventories fell while gasoline demand rose for the seventh straight week and jet fuel consumption has returned to 2019 levels, ANZ analysts said in a note.

Geopolitical risks in the Middle East from the Gaza crisis and a ramp-up in Ukrainian drone attacks on Russian refineries are also underpinning oil prices.

In Ecuador, state oil company Petroecuador has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains, sources said on Friday.

In the U.S., operating oil rigs fell three to 485 last week, their lowest since January 2022, Baker Hughes (BKR.O), opens new tab said in its report on Friday.