NEW YORK: Crude oil prices inched higher in choppy trade on Friday, as short covering fueled a small rally after four days of sharp losses, though gains were limited as prices failed to break through key technical levels.
Despite Friday’s rise, US crude and Brent were on track for their steepest weekly loss in 10 weeks and eight weeks, respectively, after the International Energy Agency predicted the global market would remain oversupplied through 2016.
Brent futures for December delivery rose 9 cents to $49.82 a barrel, a 0.2 percent gain, by 1533 GMT. US crude rose 30 cents, or 0.7 percent, to $46.68 per barrel.
Earlier Friday, West Texas Intermediate futures gained over a dollar in technical trade after briefly rising over the 14-day moving average, traders said. But, it was unable to maintain the gains and returned to levels little changed from Thursday’s close.
Investors are awaiting indications on US production from the weekly Baker Hughes rig count. The rig counts have seen the longest streak of weekly declines since June, data showed last Friday.
“Rig counts out soon will influence trade into the weekend. A crude surplus of 106 million barrels against the five-year average is a bearish cloud over the market,” said Tony Headrick, energy analyst at CHS Hedging.
“A stronger dollar, an overall US crude build and another strong build in Cushing could impact sentiment throughout the day which could lead to a setback in prices across the petroleum complex, or at least limit a significant rally,” Headrick added.
Strong equity markets also supported earlier gains as European shares reached a two-month high, buoyed by bullish Asian and US trading on positive US economic data.
“Even if crude prices go up now, we could be seeing Iranian crude coming back to the market, pushing it down again. I think downward movement is more likely for the rest of this year,” said Daniel Ang, an investment analyst at Singapore-based Phillip Futures.
A meeting of OPEC technical experts in Vienna on Oct. 21 may give indications whether sentiment is shifting within the organization about maintaining production levels as prices remain muted.
In the North Sea, the Buzzard oilfield, which plays a role in pricing global crude exports, was shut after an operational glitch.
Oil falls after failing to break technical resistance
