Prices, however, fell for the first week in six, pressured by rising U.S. output data and doubts that Russia would support an extension of the OPEC output cut deal. Prices rebounded after Thursday’s comments by Saudi Arabia’s energy minister signaled a willingness to extend output cuts when OPEC meets on Nov. 30.
“Obviously, the comments gave us guarantee that the extension is going to happen and was a driving story overnight,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
“Globally, we’re coming against the backdrop of tightness in distillate inventories and strong global refinery demand. Those catalysts will continue to drive us higher.”
Brent crude oil rose $1.36, or 2.2 percent, to settle at $62.72 a barrel while U.S. West Texas Intermediate crude (WTI) ended $1.41, or 2.6 percent, at $56.55 a barrel.
For the week, Brent was down 1.3 percent and WTI fell 0.3 percent.
TransCanada Corp’s <TRP.TO> 590,000 barrel-per-day (bpd) Keystone pipeline remained shut after a leak in South Dakota on Thursday.
Traders said the shut-in would add to bullish sentiment due to fewer barrels going into Cushing, Oklahoma, the delivery point of the WTI contract. The WTI prompt spread <CLc1-CLc2> narrowed by as much as 7 cents in the day.
Meanwhile, money managers raised their net long U.S. crude futures and options positions this week, with short positions at their lowest level since March.
Prices fell this week as fears of oversupply remained after U.S. government data showed oil output <C-OUT-T-EIA> touching a record 9.65 million bpd last week. The International Energy Agency also said that the United States would account for 80 percent of the global increase in oil production over the next decade.
“Market participants are closely watching the rising oil-production profile in the U.S., which will remain the predominant bearish factor,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
U.S. energy companies kept the oil rig count unchanged this week, General Electric Co’s Baker Hughes energy services firm said on Friday. Some analysts expect a gradual decline in the fourth quarter. [RIG/U]
Signs of rising U.S. output have dampened the impact of output cuts by the Organization of the Petroleum Exporting Countries (OPEC), Russia and several other producers.
Earlier this week, Russia’s Rosneft said an exit from the supply curb deal was a serious challenge, though added that it was committed to a deal. – Reuters