Oil bounces off three-week high as dollar rebounds

Oil futures fell over one percent away from early February highs as the dollar index rebounded from December 17, 2014 lows for the seventh session out of eight, following earlier data from the US, the world's largest energy consumer. 

Federal Reserve Chair Jerome Powell testified on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC, today. 

As of 05:55 GMT, US West Texas Intermediate fell 1.39% to $63.02 a barrel from the opening of $63.91, while Brent futures due on April 15 declined 1.16% to $66.72 a barrel from the opening of $67.50, as the dollar index rose 0.49% to 90.29 from the opening of 89.85. 

In his testimony earlier today, Powell expressed admiration for former Chair Janet Yellen's work to strengthen the economy and normalize the balance sheet, lauding her for helping to smooth out the transition and provide continuity in monetary policy. 

Powell expected the Fed to continue tightening monetary policy gradually, while pointing to economic outlook as strong, asserting the importance of balancing the push of inflation just towards the target and not beyond it, adding that labor strength will underpin spending and income. 

Earlier US data showed durable goods orders fell 3.7% in January, compared to a 2.8% rise in December, and missing expectations of a 2.4% drop, while core orders also fell 0.3%, compared to a 0.7% rise in December and missing forecasts of 0.4% rise. 

The goods trade deficit widened while wholesale inventories rose past expectations in January, as the House Price index slowed more than expected in December. 

The Richmond Manufacturing Index rose to 28 in February from 14 in January, beating expectations of 15, while the CB consumer confidence survey rose to 130.8 in February from 124.3 in January, beating forecasts of 126.2. 

 Fatih Birol, Executive Director of the International Energy Agency, said in earlier remarks that the US will become the world's largest crude producer by next year, or even this year, passing Russia by piercing 11 million bpd. 

UAE energy minister and President of OPEC Suhail Al Mazroui said that he's optimistic on the return of balance to the oil market this year, noting that the oil market just needs more essential investments in its resources. 

Saudi Arabia's oil minister Khalid Al Falih said that OPEC's output cuts could be phased out in 2019 in a way that doesn't rattle markets, while setting up a permanent frame to stabilize markets. 

Al Falih said Saudi output from January through March will be much less than production capacity, with exports falling below 7 million bpd. 

Baker Hughes reported a rise of the US oil rig count last Friday by a single rig to a total of 799 rigs, the highest since April 2015.