US crude settles at $54.73 a barrel; down 4% on the week

Reuters with staff
A Lufkin Industries Inc. Mark II Unitorque electric pumping unit removes crude oil from a Fidelity Exploration & Production Co. well outside South Heart, North Dakota.
Daniel Acker | Bloomberg | Getty Images

U.S oil futures ended lower on Friday, tumbling as the dollar strengthened and a supply glut in top consumer the United States trumped worries about falling production from Libya.

U.S. crude settled down 2 percent, or $1.11, at $54.73 a barrel in thin trade as many countries were still on Christmas holiday. The contract has declined some 4 percent this week.

was last trading about 70 cents lower at $59 a barrel.

The market had come under pressure from Wednesday's DOE report, which showed a 7.3 million-barrel rise in crude inventories to their highest December level on record. Analysts had expected a seasonal decline.

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The slide was exacerbated as oil prices reacted to a strengthening dollar index.

"There's still significant weakness in confidence, and that means that we're going to have occasional retests to the downside," said Richard Hastings of Global Hunter Securities. The strenghtening dollar index triggered the slide Friday, he said.

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Additionally, the market continued to reel from bearish storage data just before the Christmas holiday.

"The numbers on Wednesday were really bearish, and it's possible the market is still trying to digest them," said Andrew Lebow of Jefferies in New York. "Maybe the path of least resistance is down here, given that we've been in a long down trend."

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Crude imports by Japan, the world's fourth-biggest oil buyer, dropped 17.3 percent in November from a year earlier to 14.68 million kilolitres (3.08 million bpd), government data showed on Thursday.

On Friday, officials said the blaze had spread to two more tanks.