Oil up, marking third week of gains as market sentiment improves | Reuters
NEW YORK Oil prices rose on Friday and notched their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing. Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector, traders said.
NEW YORK Oil prices rose on Friday and notched their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing.
Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector, traders said.
"The current rally is driven by a market sentiment that is becoming more and more convinced that the worst is over and the global oil market rebalancing process is already in play," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
Brent futures LCOc1 ended the session up 1.3 percent at $45.11 per barrel, while U.S. West Texas Intermediate CLc1 crude settled up 1.3 percent at $43.73 a barrel. Both contracts jumped as much as 3 percent during the session.
The rally was limited by profit taking ahead of the weekend, brokers said.
Brent has surged 4.5 percent this week and U.S. crude 8.4 percent as both benchmarks notched a third week of gains. Crude is up more than two-thirds since its 2016 lows between January and February.
Traders also pointed to strong crude imports to China in March as supporting prices.
Still, some analysts warned that the oil market was still far from balancing supply and demand.
"While this recent rally has the potential to run further to the upside ... we believe that it is not yet driven by a sustainable shift in fundamentals," Goldman Sachs said in a note to clients.
The Wall Street bank maintained its view that a sustainable balancing of the market, driven by declines in U.S. shale oil production, would take place in the third quarter.
Many analysts have said they expect producers in the United States to take every opportunity to aggressively hedge by selling as soon as oil prices recover for short periods of time. This would have a tendency to pressure prices in later months, which could in turn limit front-month gains.
Sure enough, EOG Resources placed hedges for nearly 10 million barrels of crude oil in the first quarter through June 30, according to a regulatory filing this week.
Falling output, especially in the United States, where many producers have reeled from an up to 70 percent oil price rout since mid-2014, has helped to lift the market.
U.S. energy firms cut oil rigs for a fifth week in a row to the lowest level since November 2009, oil services company Baker Hughes said on Friday.
French investment bank Natixis said it expected U.S. oil production to drop by at least 500,000 to 600,000 barrels per day (bpd) this year, compared with 2015, and by another 500,000 bpd in 2017.
Despite the recent rally, oil markets remain oversupplied as between 1 million and 2 million barrels of crude are being pumped out of the ground every day in excess of demand, leaving storage tanks around the world filled to the brim with unsold fuel.
(Additional reporting by Ron Bousso in London and Henning Gloystein in Singapore; Editing by David Gregorio and Richard Chang)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Facebook's policy of pursuing profits regardless of documented harm has sparked comparisons to Big Tobacco, which knew in the 1950s that its products were carcinogenic but publicly denied it into the 21st century
According to Facebook, parents can help by repeatedly talking to their teens about the difference between appearance and reality.
Their official meeting or reunion took place on Monday (13 September) in Texas, but the two had earlier met at the border last week. They met each other after communicating on social media.