By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil prices retreated on Friday, after U.S. President Donald Trump's remarks on trade boosted the dollar, weakening greenback-denominated commodities, including crude.
Trump told Canada and the European Union to do more to bring down trade surpluses, a day after hitting the two U.S. allies and Mexico with import tariffs on steel and aluminium.
The president's comments boosted the dollar and sparked selling in dollar-denominated commodities, said John Kilduff, a partner at Again Capital Management.
U.S. West Texas Intermediate (WTI) crude futures fell 1 percent, or 64 cents, to $66.40 a barrel, by 1:09 p.m. EDT (1709 GMT). For the week, WTI was on track for a nearly 2.2 percent fall, adding to last week's near 5 percent decline.
Global benchmark Brent fell 51 cents to $77.05 a barrel, a 0.7 percent loss. It was set for a 0.8 percent gain for the week.
WTI's discount to Brent widened to as much as $11.57 a barrel, largest since 2015, before narrowing to $10.76 a barrel as both grades retreated.
Concerns about growing U.S. crude production and a glut trapped inland due to a lack of pipeline capacity have pressured prices of WTI, doubling its discount to Brent over the course of a month.
U.S. crude production rose in March by to 10.47 million bpd, a monthly record, the Energy Information Administration said on Thursday.
On a weekly basis, it rose to 10.8 million bpd last week, close to top producer Russia, the EIA said. [EIA/S]
"The weekly number suggesting U.S. production is really strong and continuing to rip higher," said Matt Smith, director of commodity research at ClipperData. But without adequate transportation to get crude to the coasts, "we're going to continue to see some weakness in WTI," he said.
U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, General Electric Co's Baker Hughes energy services firm said on Friday. That was the eighth time drillers added rigs in the past nine weeks.
Saudi Arabia, effective leader of the Organization of the Petroleum Exporting Countries, and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output. Any rise in production would be gradual, a Gulf source said.
Russia could raise oil output within months if there is a decision to unwind the pact, a Russian Energy Ministry official said.
(Additional reporting by Stephanie Kelly in New York, Roslan Khasawneh and Naveen Thukral, and Shadia Nasralla in London.; Editing by David Gregorio and Marguerita Choy)
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Updated Date: Jun 02, 2018 00:06 AM