Oil prices on Friday bounced up off the year’s lows as some producers reduced exports and U.S. rig additions slowed, but the rebound was modest and crude posted its fourth weekly decline on persistent concerns about global oversupply.
Brent crude futures rose 45 cents to settle at $47.37 per barrel and U.S. West Texas Intermediate (WTI) crude settled at $44.74 per barrel, up 28 cents. Both benchmarks notched a weekly loss exceeding 1.6 percent.
On Thursday, oil prices hit six-month lows. They are down more than 12 percent from late May when producers led by the Organization of the Petroleum Exporting Countries extended a pledge to cut output by 1.8 million barrels per day (bpd) through March 2018.
“You‘re starting to get to the lower end of the range,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. He said that even bullish market watchers are accepting that prices are likely to remain lower for longer.
But OPEC members Nigeria and Libya, which are exempt from the deal, have increased exports as they bounce back from supply disruptions caused by protests, rebel activity and mismanagement.
In the latest sign of a crude glut, ageing supertankers are being used to store unsold oil off Singapore and Malaysia.
Rising U.S. crude output has undermined OPEC-led cuts, with production up more than 10 percent in the past year. U.S. Energy Information Administration (EIA) data this week showed growing gasoline stocks and shaky demand. [EIA/S]
U.S. energy companies added oil rigs for a record 22nd week in a row, energy services company Baker Hughes said on Friday. Still the pace of additions has slowed in recent months, and lower prices could test shale’s resiliency.
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