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AnalysisOil continued its drop for the second day on Friday, heading for the third consecutive weekly drop, after the International Energy Agency (IEA) said 60 million barrels of oil should be released in July to buttress economic recovery.  

Consequently, J.P. Morgan cut its forecast for Brent crude to $100 a barrel in the third quarter from $130 estimated previously while Goldman Sachs predicts a range between $105 and $107 a barrel by the end of next month.

Oil for August delivery is currently trading near the day's low at $91.26 a barrel compared with the day's opening level of $92.23, where it dropped $2.22 on Thursday's session.  

Moreover, The EIA report released on Wednesday showed that the U.S commercial crude oil inventories decreased by 1.7 million barrels from the previous week. Total motor gasoline inventories decreased by 0.5 million barrels last week and are near the upper limit of the average range.

By extension, finished gasoline inventories increased while blending components inventories decreased. Distillate fuel inventories increased by 1.2 million barrels last week and are above the upper limit of the average range for this time of year.

On the other hand, the dollar's strength helped lowering demand on oil where the dollar index, which tracks the dollar movements versus a basket of major currencies, rose for the third day to 75.44 from the day's starting level of 75.30.

The dollar gained ground after Brenanke's speech that followed June's rate decision as he did not give any hint of possible QE3 while he expected the US economy growth to be stronger in the second half of the year.

Later in the day, eyes will be on US annualized GDP for the first quarter and durable goods report for May.