Oil prices stalled last week despite a weaker US dollar, lower bond rates, and bullish chatter about rising demand.
The fall over the week came as Saudi Arabia extended its production quota, as did Russia and other members of OPEC. The Saudis also raised their official selling prices to Asian customers, which raised eyebrows.
China unveiled its January and February trade figures, showing oil imports up year-on-year, but with a trend towards slower growth month-on-month. The real star, though, was the surge in gas and especially LNG imports (and coal imports, for that matter).
In the United States, weekly inventories continue to rise modestly, with stocks of petrol starting to build ahead of the driving season starting in May.
All positive — as was a drop of two in the number of oil rigs operating in the US after a rise of 10 over the previous two weeks. Four gas rigs stopped operating as US prices again fell 1.5% for the week and nearly 22% year-to-date.
Brent crude ended around $US82.05, down 1.7% for the week, while WTI finished at $US77.84, down 2.4% for the week.
Baker Hughes figures fell to 504 from 506, while the number drilling for gas dropped by four to 115. Miscellaneous rigs totaled three after dropping by one. A year earlier, the US had 590 oil rigs, 153 gas rigs, and three miscellaneous rigs in operation, the company's data showed. Overall, 622 rigs were operating in the US this week, down from 746 a year earlier.
West Texas Intermediate crude oil fell 1.3% to $77.88 a barrel on Friday afternoon in a week that has seen investors assess rising tensions in the Middle East, according to a Friday note by Australian and New Zealand Banking Group.
The Houthi militant group killed three seafarers in the Gulf of Aden on Wednesday, according to the US Central Command, marking the first fatal attack against a container ship in the critical Red Sea shipping corridor.
The attack "has seen shipping companies refusing to transit the Red Sea,” ANZ analysts said. "The longer shipping times now required by many tankers is resulting in increased oil sitting on ships unavailable to the market."
Meanwhile, demand in the US "looks to be improving," ANZ said. It pointed to a drawdown of 4.5 million barrels in gas inventories through the week ended March 1, according to Energy Information Administration data. "With the US driving season just on the horizon, the market could get even tighter in coming weeks," it wrote.
