Crude rose for a second week as US supplies drain and a key Libya oil field was shut.
News of a production halt at Libya’s 70,000 barrel-a-day El-Feel field helped cap a weekly drop of more than 3 percent, after a report on Thursday showed storage tanks at the Cushing, Oklahoma, hub are at their lowest levels since 2014 as exports of US crude surge.
“Yesterday’s inventory report was very bullish for crude oil,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone.
The decline of stockpiles “is starting to turn into a potentially critical situation that could be very supportive” for West Texas Intermediate (WTI) crude prices, plus “the trouble in Libya seems to be on the upswing,” he said.
The rapid decline in US stockpiles and growing demand for crude from the country’s booming shale fields are helping reassure the market that production cuts led by OPEC are working.
The global oil market is rebalancing and the decline in inventories is expected to continue this year, Saudi Arabian Minister of Energy and Industry Khalid Al-Falih on Friday told reporters in New Delhi.
WTI for April delivery on Friday rose US$0.78 to settle at US$63.55 a barrel on the New York Mercantile Exchange, the highest level in more than two weeks.
The contract is little changed from last week’s US$63.49 a barrel.
Total volume traded was about 26 percent below the 100-day average.
Brent for April settlement climbed US$0.92 to settle at $67.31 a barrel on the London-based ICE Futures Europe exchange.
The contract rose 3.8 percent from last week’s US$64.84 a barrel.
The global benchmark crude traded at a US$3.76 premium to WTI.
US crude exports last week surpassed 2 million barrels a day for only the second time on record, according to US Energy Information Administration data on Thursday, while stockpiles at Cushing shrank for a ninth straight week to 30 million barrels.
Crude production edged lower for the first time since early last month.
“We probably have a little more strength to go,” in terms of upside potential for prices, John Macaluso, a trader at Tyche Capital Advisors LLC in New York, said by telephone.
“Production, while still up, has tailed off,” he said.
Oil market news:
‧ The US oil rig count rose for a fifth week, up by one to 799, the highest since April 2015, according to Baker Hughes Inc data on Friday.
‧ Top officials from the administration of US President Donald Trump are planning two summits to discuss possible changes to the US biofuel mandate, according to people familiar with the discussions, as the White House grapples with political fallout from the bankruptcy of the largest refiner in the northeast.
‧ Gasoline
futures in New York rose 3.3 percent this week.
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