FX.co ★ Oil Extends Losses As Dollar Rises On Risk Aversion

Oil prices extended losses on Friday and were on track for a fourth consecutive weekly loss after signs of another build in U.S. inventories and concerns about China's patchy recovery.

The impasse on raising the U.S. debt ceiling and a stronger dollar also weighed on prices.

Benchmark Brent crude futures dropped 0.3 percent to $74.75 a barrel, while WTI crude futures were down 0.1 percent at $70.78.

The dollar gained on safe-haven demand after U.S. Treasury Secretary Janet Yellen warned that a default on the U.S. debt would be catastrophic and was "unthinkable".

Fears of a banking sector crisis deepened after PacWest announced it lost almost a tenth of deposits in the first week of May.

There is also uncertainty around the Fed's policy stance.

Federal Reserve Governor Michelle Bowman said in a speech today that policy rate will need to remain sufficiently restrictive for some time to bring inflation down and create conditions that will support a sustainably strong labor market.

Traders shrugged off a report from OPEC that forecast an increase in Chinese oil demand. The OPEC report says China is now expected to require 800,000 barrels per day, up from 760,000 barrels per day seen last month.