Crude Oil See’s Biggest Gains In Two Months
Oil prices gained as much as 4.8 percent on Friday.
Crude oil prices rose by almost 5 percent on Friday, their largest gain in nearly two months as a steady dollar and lower count of US oil rigs being operated spiked bets on improvement.
US crude rose by $4 a barrel at points after prices hit a one-month low two days ago. The rally locked in a staggering record 11th weekly gain which has been influenced by shifting sentiment and declining domestic oil inventories. OPEC has a meeting planned next week which is expected to keep production of oil at high levels.
Baker Hughes released information showing that the amount of rigs in operation had dropped despite speculation that more may have been put back into operation sparking a positive sentiment from oil bulls. Data compiled by the US Energy Information Administration (EIA) on Thursday showed crude oil inventories went down by 2.8 million barrels last week, with this being the fourth week in inventory drops.
Brent crude stabilized at $65.56 a barrel, a gain of $2.98, or 4.8 percent on Friday. It was flat on the week, while for the month, it fell 2 per cent. US crude finished at $60.30, up $2.62, or 4.5 percent on Friday up around 1 percent in the week and for the month.
Tensions rose in the Middle East following a bombing in Saudi Arabia which killed three people in a mosque, the attack has been claimed by the Islamic State.
“The dollar’s stalling provided the spark for today, and coupled with the bullish crude draws data, the encouraging rig count numbers and Middle East worries, the market just went into a frenzy,” said John Kilduff, partner at New York energy hedge fund Again Capital. Analysts have however warned that prices may fall again due to the global supply glut.
OPEC is expected to maintain a collective output target of 30 million barrels per day and whilst production is estimated to be 1 million BPD over target. With the demand for its oil being much lower there could be a surplus above 2 million BPD.
The dollar edged lower on Friday against a basket of major currencies following gains of 2.5 percent this month.
