Oil hovers near 3-1/5 year highs, dollar inches up

Oil futures tilted lower in American trade away from November 2014 highs as the dollar index scaled December 18 highs, amid a lack of data from the US, the world's largest energy consumer, and after remarks by Russian energy minister Alexander Novak. 

As of 05:31 GMT, US crude futures due on June 15 fell 0.22% to $71.33 a barrel from the opening of $71.49, while Brent futures due on July 15 inched down 0.23% to $79.12 a barrel from the opening of $79.30, as the dollar index rose 0.15% to 93.61 from the opening of 93.47, marking five-month highs. 

Federal Reserve Bank of Cleveland President Loretta Mester spoke earlier today about monetary policy at the ECB macroprudential policy and research conference, in Frankfurt, where she noted the US economy is almost at full employment, with outlook being the best in a long time.

Mester said rate hikes are some of the tools used to counter potential risks to financial stability, asserting the importance of having fiscal policies that corroborate and enhance monetary ones. 

On Wednesday, the Energy Information Administration released its report on US crude stocks, showing a drawdown of 1.4 million barrels in the week ending May 11, compared to a 2.2 million deficit in the previous week, while analysts expected a 1.1M drawdown, with total stocks now down to 432.4 million barrels. 

Gasoline stocks fell 3.8 million barrels, while distillate stocks, including heating fuel, dipped 0.1 million barrels. 

Russian energy minister Alexander Novak said earlier that balancing the market would take more time, after Saudi Arabia said the oil market remains unbalanced, with the kingdom ready to cooperate with allies to compensate any possible shortages. 

Baker Hughes reported an increase of 10 rigs in the US oil rig count last week to a total of 844 rigs, the highest since March 2015. 

US output is up 27% from mid-2016 to a total of 10.7 million bpd, passing Saudi Arabia's 9.9 million bpd, and encroaching on Russia's 11 million bpd.