Commodities
Oil futures rose for the seventh straight session on Friday, remaining in bull market territory, as investors continued to bid up prices amid speculation major oil producers, led by Saudi Arabia and Russia, are reconsidering a collective production freeze in an effort to boost the market.
Crude pared some gains after a report showed the number of U.S. oil rigs rose for the eighth week in a row, underling concerns over a global supply glut.
On the ICE Futures Exchange in London, Brent oil for October delivery touched an intraday peak of $51.22 a barrel, the most since June 22, before giving back some gains to settle at $50.88 by close of trade, down a penny on the day.
For the week, London-traded Brent futures surged $3.91, or 8.32%, marking the best weekly gain since early April.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in September ended at $48.52 a barrel, up 30 cents, or 0.62%. It touched a session high of $48.75 earlier Friday, a level not seen since July 5.
New York-traded oil futures rallied $4.03, or 9.06%, on the week, the largest weekly gain in five months.
Crude futures have now surged almost $10 a barrel, or nearly 25% from their August 2 lows, officially charging into a bull market, as the prospect of an output freeze by major producers sparked a massive rally.
The market started to recover a little over two weeks ago, when Saudi Arabia’s energy minister said the country would work with other oil producers to stabilize prices at an informal OPEC meeting in Algeria next month.
The rally received additional support after Russia expressed willingness to participate in those talks, which some say could lead to a pact to freeze production levels.
However, market analysts remained skeptical that the meeting would result in any concrete actions.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Despite recent gains, indications of an ongoing recovery in U.S. drilling activity combined with elevated stocks of fuel products around the world is expected to keep prices under pressure in the near-term.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 10 to 406, the eighth consecutive weekly rise and the 11th increase in 12 weeks.
Some analysts have warned that the current rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, underlining concerns over a global supply glut.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, August 23
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, August 24
The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.
Friday, August 26
Baker Hughes will release weekly data on the U.S. oil rig count.
Source by Investing.com
No comments:
Post a Comment