By Barani Krishnan
NEW YORK (Reuters) - Crude oil prices fell on Friday as a stronger dollar weighed on the market and as traders awaited an industry report that would determine if U.S. oil drillers were ramping up activity with prices holding above $50 a barrel.
Brent, the London-trade crude benchmark, was down 40 cents, or 0.8 percent, at $51.63 a barrel by 11:05 a.m. EDT (1505 GMT), after rising earlier to $52.55.
U.S. West Texas Intermediate (WTI) crude shed 34 cents to $50.14, after peaking at $51.14 earlier.
The U.S. benchmark saw better support than Brent due to an extended outage on a pipeline capable of delivering 450,000 barrels per day of crude into the Cushing, Oklahoma delivery hub for WTI, traders said.
Both Brent and WTI rose in the previous session, continuing their recent upward momentum, despite the U.S. government reporting the first domestic crude inventory build in six weeks.
Prices rose as market participants focused instead on larger-than-expected drawdowns in diesel, gasoline and other stockpiles reported by the U.S. Energy Information Administration. [EIA/S]
But in the latest session, a rallying dollar, which rose nearly 0.5 percent, weighed on the greenback-denominated crude, making it costlier to holders of the euro and other currencies.
Concerns about the near 5 million-barrel crude build reported by the EIA on Thursday also forced crude prices to retreat.
These aside, traders cited caution ahead of the closely-watched weekly report on the U.S. oil rig count due from industry firm Baker Hughes at 1:00 p.m. EDT (1700 GMT). The number of active oil rigs in the country has not fallen for 15 straight weeks, the longest stretch since 1987. [RIG/U]
If the rig count rose by more 10, "it will likely spur significant selloff" in oil, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
Oil prices have trended higher since Sept. 27, with Brent gaining about 13 percent and hitting one year highs above $53, after the Organization of the Petroleum Exporting Countries announced its first planned output cut in eight years.
OPEC plans to rein in a global supply glut that forced crude to crash from mid-2014 highs above $100 and has asked other major producers, including Russia, to join in cutting output. But OPEC itself has been producing at record highs most of this year, making traders and investors sceptical of its target. [OPEC/M]"The fundamental backdrop is still bearish," said Commerzbank analyst Carsten Fritsch. "Every increase is driven by speculation and optimism," rather than an actual tightening of supplies, he said.
(Additional reporting by Alex Lawler in LONDON and Henning Gloystein in SINGAPORE; Editing by David Goodman and Chris Reese)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)