* Brent and U.S. crude slide on day, but up on week
* Higher output at nearly $50 seen trumping supply outages
* Yellen speech bumps up dollar, keeping oil under pressure
* Longer U.S. Memorial Day weekend deters long positions
(New throughout, updates prices, market activity and comments
to settlement)
By Barani Krishnan
NEW YORK, May 27 (Reuters) - Oil prices dipped for a second
day in a row on Friday as some investors took profit on a surge
to seven-month highs while others worried about higher
production with the market hovering near $50 a barrel.
A stronger dollar .DXY also weighed on demand for
dollar-denominated oil from holders of other currencies. The
dollar spiked after Federal Reserve Chair Janet Yellen said a
U.S. rate hike was probably appropriate in coming months.
USD/
A three-day weekend for the United States, owing to Monday's
Memorial Day holiday, further discouraged investors from holding
bullish bets.
"People are worried crude production will come roaring back
at these prices," said Phil Flynn, energy markets analyst at the
Price Futures Group in Chicago.
"But I also think we are down because of higher interest
rate concerns and the longer weekend," Flynn said. "You don't
want to be long on a $50 position when oil could be below $48 by
the time the new week opens."
Brent crude LCOc1 settled down 27 cents, or 0.5 percent,
at $49.32 a barrel. It rose to $50.51 in the previous session,
its highest since early November.
U.S. crude CLc1 slipped 15 cents, or 0.3 percent, to
settle at $49.33. It hit an October high of $50.21 on Thursday.
On the week, Brent rose 1 percent and U.S. crude about 3
percent, helped by gains from earlier this week.
With prices finally hitting $50, both Brent and U.S. crude
are likely to face technical barriers in the next three to five
weeks, analysts said. Producers and speculators have also been
loading up on options contracts of U.S. crude to protect
themselves from downside risk.
Oil pushed past $50 after supply disruptions from Canadian
wildfires and militant attacks in Nigeria helped cut global
daily output by 4 million barrels.
"Most of these outages are unlikely to last," UBS analyst
Giovanni Staunovo said, anticipating resumption of supply from
those sources as well as higher production from the Organization
of the Petroleum Exporting Countries.
Dominick Chirichella, senior partner at New York's Energy
Management Institute, said U.S. crude output could rise by an
estimated 300,000 to 400,000 barrels per day as shale producers
put drilled but uncompleted wells, or DUCs, into production.
The slide in the U.S. oil rig count has virtually halted as
well, with just 2 rigs idled this week, data from industry firm
Baker Hughes showed on Friday. RIG/U
In the coming week, investors will watch the outcome of an
OPEC meeting for signs of more output from Saudi Arabia and Iran
in their battle for market share.