Oil Prices on Friday, June 30, were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output, Reuters reports.
U.S. crude futures CLc1 have added 5.1 percent this week, while benchmark Brent LCOc1 has gained 4.8 percent, marking the biggest rise for both markets since the week ending May 19.
U.S. crude was trading up 0.6 percent, or 27 cents, at $45.20 a barrel at 0646 GMT on Friday, with Brent climbing 0.6 percent, or 30 cents, to $47.72 a barrel.
“Oil prices received momentum from Wednesday’s U.S. data and the market rejected the lows that we saw. It has been a bullish week for the oil market,” said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.
“There are two key drivers. One is U.S supply side response to low oil prices. We could see more gains if there is a further drop in oil output, and the other factor is a weaker U.S. dollar.”
Data indicating a fall in U.S. production bolstered markets this week after crude prices hit a 10-month low last week in the face of a mounting supply glut.
U.S. crude output fell 100,000 barrels per day (bpd) to 9.3 million bpd last week, the steepest weekly fall since July 2016.
Meanwhile, the North Sea crude oil market is showing signs of long-lost strength, suggesting that some of the pessimism that has driven down oil futures and created a record bet against a price rise may be unjustified.
On Thursday, about 6 million barrels of North Sea Brent crude were being stored on ships, down from four-month highs of as many as 9 million last week, and trading sources said it seemed now refineries were starting to take in more cargoes. <CRU/E>
Global oil supplies remain ample despite output cuts of 1.8 million bpd by the Organization of the Petroleum Exporting Countries and other producers since January.
OPEC has exempted Nigeria and Libya from the curbs, leaving them free to ramp up output following local unrest, with Libyan oil production nearing 1 million bpd.
