Global oil futures ended sharply higher Friday night, posting their largest weekly gain in about four months as traders held out hope for price-stabilisation measures by OPEC countries next month.
Prices continued to firm off the back of the remarks on Thursday from Saudi Arabia’s Energy Minister Kahlid al-Falih suggesting the country’s willingness to help balance the market.
Those comments boosted US West Texas Intermedia and Brent crude futures by more than 4% on Thursday, and by another 2% plus on Friday.
But traders ignored yet another weekly rise in the number of oil drilling rigs in use in the US, which will rise if OPEC and Saudis do anything to reduce global production.
On Friday, September West Texas Intermediate added $US1, or 2.3%, to close at $US44.49 in New York. US futures prices picked up $2.69, or 6.4%, last week, marking the best weekly gain for crude since early April.
In London, Brent crude for October delivery added 93 cents, or 2%, to finish at $US46.97 a barrel. For the week, Brent gained 6.1% – its best weekly gain since late April.
“Crude-oil prices have stormed back to life over the past couple of weeks, albeit in a volatile manner,” said Fawad Razaqzada, chief technical analyst at Forex.com, in a note, quoted by Marketwatch.com.
“The latest trigger behind the rally has been attributed in the media to comments from Saudi Arabia’s energy minister” who said Thursday that this country, the biggest producer among members of the Organization of the Petroleum Exporting Countries, “could participate in coordinated action to help balance the crude-oil market,” said Razaqzada.
OPEC’s 14 members will meet on the sidelines of an energy conference next month in Algeria, reviving the idea of a coordinated production cap, after a similar move failed at a meeting in April.
Making the Saudi comments look odd was the news earlier last week that the country is pumping record amounts of oil – 10.67 million barrels a day in July. That saw some analysts cast doubts over the kingdom’s sincerity.
Traders ignored another rise in active oil rig use last week.The weekly report from Baker Hughes showed that the number of active oil rigs in use rose for a seventh straight week.
Baker Hughes said the US oil-rig count climbed by 15 to 396 as of Friday (from a low of 316 in late May). That’s a rise of 25% and now getting serious for the market. The active US rig count also increased by 17 to 481.
The International Energy Agency said on Thursday that non-OPEC production will fall by 900,000 barrels this year, before rebounding by 300,000 barrels a day in 2017.
The agency sees global oil-demand growth to slow to 1.2 million barrels a day in 2017 from 1.4 million barrels forecast for this year.
Meanwhile it was another negative week for gold which seems to have lost some of its recent energy.
Gold futures settled lower overnight Friday and prices ended in negative territory, for their fourth weekly decline in five.
But that was after the metal had spent much of the session trading higher as that weak economic data from China and the US encouraged traders.
But the price gains didn’t hold and the metal sold off. A slightly weaker US dollar also confused the outcome.
Comex futures as a result prices failed to hold ground above the key $US1,350 – an-ounce level.
So Comex December gold fell $US6.80, or 0.5%, to settle at $US1,343.20 an ounce a high of $US1,362.50.
For the week, prices lost about 0.09%, according to FactSet data.
Comex silver for September delivery fell 31.7 cents, or 1.6%, to $US19.703 an ounce, a loss of 0.6% for the week.
Comex copper futures for September delivery fell 5.1 cents, or 2.3%, to $US2.14 a pound – down nearly 0.7% for the week.
