NEW YORK, (Reuters) – Oil prices fell on Friday, after seven straight higher settlements, as the euro-zone’s debt crisis brought economic concerns back in focus, pressuring the euro and strengthening the dollar.
The U.S. August crude contract expires at the end of Friday’s session. Both U.S. and Brent futures remained on pace for weekly gains after touching eight-week peaks on Thursday.
U.S. and European equities slid and the euro weakened broadly after Spain’s heavily indebted Valencia region called for aid, increasing investor fear that the Spanish government is moving toward a full-blown bailout.
“The dollar spiking higher versus the euro on Spain banks needing help pushed oil lower. Some geopolitical fatigue seemed to emerge as well, with the rumors about Assad taking a deal. Looks like if he goes we will get a sell-off,” said John Kilduff, partner at Again Capital LLC in New York.
Brent September crude fell $1.75 to $106.05 a barrel by 12:17 p.m. EDT (1617 GMT), but was still set to post a 3 percent weekly gain and has risen nearly 18 percent over the past four weeks.
Expiring U.S. August crude was down $1.69 at $90.97 a barrel, heading for a more than 4 percent weekly gain.
U.S. September crude fell $1.70 to $91.27 a barrel.
“I think after seven straight upward closes it’s not surprising to see a slight retracement, not really reading much more into it,” said Tony Machacek, an oil futures broker at Jefferies Bache.
Concerns about potential supply disruptions in the Middle East have pushed up oil prices recently as violence in Syria intensified and after a Bulgarian bus bombing that killed Israeli tourists – an act Israel blamed on Iran.
But brokers and traders noted that news that China will load full contracted volumes of Iranian oil in July after refiner Sinopec and the National Iranian Tanker Co resolved a freight dispute added to the bearish sentiment on Friday.