Oil prices continued to drop as the dollar rose on expectation that the Federal Reserve will cut the stimulus program later this year.
The U.S. oil price had reached its highest level of this year by Tuesday, supported by the crisis in Syria which threatens the crude production in the Middle East.
Federal Reserve Chairman Bernanke said Wednesday that the Fed may start tapering its pace of bond purchases later this year, and may end them around in mid 2014, if economy continues to improve. The outlook for tapering lifted up the dollar. The stronger greenback decreased the appeal of dollar-priced oil for non- American buyers.
St. Louis Fed President James Bullard, one of the two members of the Federal Open Market Committee who dissented with the June meeting decision, said in a statement Friday that "the Committee's decision to authorize the Chairman to lay out a more elaborate plan for reducing the pace of asset purchases was inappropriately timed."
The disappointing economic data from China, the world's second largest economy also weighed on the oil market. According to HSBC' s preliminary results from its monthly survey released Thursday, China's manufacturing Purchasing Managers' Index of June fell to a nine-month low of 48.3.
The rising crude inventories of U.S. worried traders too. Energy Information Administration (EIA) said Wednesday, that U.S. crude inventories increased 0.3 million barrels last week to 394.1 million barrels for the week ended June 14. Analysts expected a drop of 1 million barrels.
Light, sweet crude for August delivery lost 1.45 dollars, to settle at 93.69 dollars a barrel on the New York Mercantile Exchange.
Brent for August delivery went down 1.24 dollars, to close at 10091 dollars a barrel.