Oil futures drop 1% as dollar advances

Oil futures fell over one percent in American trade as the dollar index rose, following a basket of data from China, the world's largest energy importer, and the US, the world's largest consumer. 

As of 07:10 GMT, US West Texas Intermediate declined 1.04% to $55.96 a barrel from the opening of $56.55, while Brent futures due on January 15 dropped 1.20% to $61.97 a barrel from the opening of $62.72, as the dollar index rose 0.33% to 93.97 from the opening of 93.66. 

Earlier Chinese data showed the CB leading index steadied at 1.3% in October, same as September, while several news reports indicated the growth rate there might pass 6.5% next year, especially if 2017 growth hit 6.8% or 6.9%. 

Otherwise, the CB leading index from the US rose 1.2% in October past expectations of a 0.6% rise, compared to a 0.2% decline in September, while markets look forward to any news regarding the tax reform bill in Congress. 

Baker Hughes reported a rise of 30 thousand bpd in US oil output, hitting a record high at 9.65 million bpd. 

Saudi energy minister Khalid Al Faleh said in earlier remarks that it's unlikely that global inventories will fall to five-year averages and for the global market to reach balance by next March, necessitating the need for an extension to the output cut deal. 

Al Faleh noted that recent arrests for Saudi princes and officials on corruption charges won't hurt foreign investments or the plan to underwrite some of Aramco's shares by 2018.

Earlier this week, the International Energy Agency cut its projections for global oil demand in 2018 by 200 thousand bpd to 98.9 million bpd, while cutting forecasts for global demand growth by 100 thousand bpd to 1.3 million bpd, as a more-than-usual moderate weather in the winter hurt heating fuel demand, while the recent spike in prices pave the way for more US shale production and hurt the market balance efforts in 2018.