Crude prices tumbled on Friday as fears of Saudi Arabian supplies caused by an explosion report eased and the dollar strengthened.
An Iran state owned TV reported on Thursday that an explosion hit a oil pipeline in Saudi Arabia, the biggest oil exporter in the world. The report triggered fears across the markets and pushed WTI above 110 dollars a barrel after settlement on Thursday. And the Brent crude also surged and had breached 128 dollars a barrel in the late session on Thursday.
But on Friday, a Saudi official denied the report, saying that there was neither explosion nor attack in the kingdom. Worries among the investors were eased and crude prices, therefore, retreated.
Meanwhile, the dollar strengthened as the euro fell as Spain set a much softer deficit target. The euro slipped nearly 0.9 percent against the dollar. And the dollar index rose about 0.8 percent, making the greenback-denominated crude more expensive, less attractive.
Light, sweet crude for April delivery dropped 2.14 dollars, or 1.97 percent to settle at 106.70 dollars a barrel on the New York Mercantile Exchange, ending the week with a loss of 3.07 dollars, or 2.80 percent. It was the first weekly loss since Feb. 3. In London, Brent crude for April delivery also fell sharply by 2. 55 dollars, or 2.02 percent to finish at 123.65 dollars a barrel. For this week, it decreased 1.82 dollars, or 1.45 percent.