Oil Edges Up, Hits $57.10/ barrel

Oil price surged on Friday,January 6, on futures buying, ending the week higher, but gains were limited by a strong U.S. dollar and lingering doubts about whether OPEC producers would stick to a deal to cut output.

Brent crude futures LCOc1 settled 21 cents higher at $57.10 per barrel, after trading in a range of $56.28 to $57.47. The contract posted gains for the second week in a row.

U.S. West Texas Intermediate (WTI) crude futures CLc1 ended the session up 23 cents at $53.99 a barrel, after swinging between $53.32 and $54.32. WTI notched its third straight weekly gain.

Market players attributed choppy trading to position-squaring at the end of the week and low volumes at the start of the year, Reuters reports.

“There’s a lot of volatility, or at least changes in direction,” ABN Amro senior energy economist Hans van Cleef said. “People think the long-term trend is up, but after a gain of a few dollars, they take profit.”

Top crude exporter Saudi Arabia and fellow Gulf members Abu Dhabi and Kuwait showed signs they were cutting production in line with an agreement by members of the Organization of the Petroleum Exporting Countries and other producers, yet market watchers have doubts about overall compliance.

Any signs that producers are reneging on their commitments could cause sentiment to sour and cause prices to fall back sharply, Capital Economics said in a note.

U.S. energy companies this week added oil rigs for a 10th week in a row, bringing the total count up to 529, the most since December 2015, energy services firm Baker Hughes Inc (BHI.N) said on Friday.