Oil creeps up from 10-month low, but down nearly 4% on week

OPEC-led efforts to reduce production and end the oil glut have been frustrated by soaring output from the US and OPEC members Libya and Nigeria, which are exempt from the cuts. (Reuters)

NEW YORK: Oil futures climbed almost 1 percent on Friday on lift from a falling dollar but remained down for a fifth week in a row and close to a 10-month low as production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) have failed to substantially reduce a global crude glut.

Brent futures were up 40 cents, or 0.9 percent at $45.62 a barrel by 11:52 a.m. EDT, pushing the front-month out of technically oversold territory for the first time this week.
US West Texas Intermediate (WTI) crude was up 37 cents, or 0.9 percent, at $43.11 per barrel.
Both Brent and US futures remained on track to decline for a fifth week in a row, which would be the longest slumps for front-month contracts since August 2015.
“Crude is getting a good pop off the fall in the dollar,” said Phil Davis, a managing partner at PSW Investments in Woodland Park, New Jersey.
The US dollar was down 0.4 percent against a basket of currencies, on track for its biggest daily percentage decline since early June after weaker-than-expected US economic data. This boosted greenback-denominated oil.
Still, oil prices remain down about 20 percent this year despite an effort led by OPEC to cut production by 1.8 million barrels per day (bpd).
That puts the market on course for its biggest first-half percentage fall since the late 1990s, when rising output and the Asian financial crisis led to sharp losses.
“We doubt that demand growth will accelerate sufficiently to break the current downward price momentum,” analysts at Bank of America Merrill Lynch said in a note on Friday, citing surprisingly weak recent economic data in the US, China and Asia.
OPEC-led efforts to reduce production and end the oil glut have been frustrated by soaring output from the US and OPEC members Libya and Nigeria, which are exempt from the cuts.
Thanks to shale drillers, US oil production has risen more than 10 percent in the past year to 9.35 million bpd.
“Rising US output continues to stress markets, with increasing evidence that improved efficiency and technology makes many of the shale plays profitable below $40 a barrel,” analysts at Cenkos Securities wrote.