Oil pared a weekly decline as strong US jobs growth improved the outlook that rising demand might counter the supply glut roiling the market since 2014.
Futures rose 1.1 percent in New York on Friday, trimming a weekly drop to 0.3 percent.
While US production hovers at its highest since July 2015 and output from OPEC climbed last month, sliding stockpiles and the prospects for improved demand growth lent to a more positive sentiment.
The US economy added 209,000 payrolls last month.
“The good jobs report made people think that the economy is still going strong and demand will be rebalancing the market faster than expected,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone.
The US benchmark settled above US$50 per barrel earlier this week for the first time since May, following an 8.6 percent rally last week, the biggest this year.
The breach of the key level did not last long, though, as doubts still linger that OPEC and its allies will succeed in rebalancing the market.
Russia says it has kept output levels from May and plans to do so until the OPEC production-cut pact expires.
West Texas Intermediate (WTI) for next month delivery added US$0.55 in its biggest one-day rally of the week, settling at US$49.58 a barrel on the New York Mercantile Exchange.
The contract fell 0.3 percent from last week’s US$49.71 per barrel. Total volume traded was about 2.3 percent below the 100-day average.
Brent for October settlement gained US$0.41 on Friday to close the session at US$52.42 per barrel on the London-based ICE Futures Europe exchange, down 0.2 percent from last week’s US$52.52 per barrel. The global benchmark crude traded at a premium of US$2.69 to October WTI.
US oil output last week expanded by 20,000 barrels per day to 9.43 million, the Energy Information Administration said on Wednesday.
Nationwide crude stockpiles have declined the past five weeks and fuel demand last week jumped by 21,000 barrels per day to 9.84 million, a record-high.
However, as the summer driving season ends next month, the boost it has given to the oil market might fade.
“To really push above US$50, we need to see signs that this isn’t seasonal strength in the market,” Gene McGillian, market research manager at Tradition Energy in Stamford, Connecticut, said.
Oil market news:
‧ The number of oil rigs in the US dropped by one this week to 765, according to Baker Hughes data.
‧ US crude exports averaged about 786,400 barrels per day in June, a six-month low, according to Bloomberg calculations of US Census Bureau data released on Friday.
‧ Shale explorers from Pioneer Natural Resources Co to Devon Energy Corp are among drillers amassing hedges that protect their future proceeds as far out as 2023, according to data compiled by Bloomberg.
‧ Russian oil giant Rosneft PJSC disclosed a US$1.02 billion advance payment to Venezuela’s state producer after the US on Monday sanctioned Venezuelan President Nicolas Maduro.
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