Futures advanced 1.4 percent in New York after three days of declines. Benghazi Defense Brigades forces captured Es Sider Friday afternoon as fighting escalated, according to two people with knowledge of the matter who asked not to be identified because they aren’t authorized to speak to the media. Prices have been oscillating between $50 and $55 a barrel this year as output curbs by some producers is tempered by surging U.S. supply.
As investors assess whether U.S. supply gains will jeopardize efforts by the Organization of Petroleum Exporting Countries and other nations to ease a glut, price swings have been subdued and a measure of volatility slipped to the lowest since October 2014. Data this week showed that American output has increased to the highest in almost a year, while Saudi Arabia cut oil supply by 90,000 barrels a day in February from a month earlier. Russian production was little changed last month, government data show.
“This increases the likelihood of a supply disruption,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $6.1 billion, said by telephone. “One thing we’ve learned about oil states is that whenever there’s a new leader, they end up selling oil too, but it takes time.”
West Texas Intermediate for April delivery rose 72 cents to settle at $53.33 a barrel on the New York Mercantile Exchange. The contract fell 2.3 percent to $52.61 on Thursday, the lowest close since Feb. 8. Front-month futures slipped 1.2 percent for the week. Total volume traded was about 32 percent below the 100-day average.
Brent for May settlement increased 82 cents, or 1.5 percent, to $55.90 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.12 premium to May WTI.
Futures extended gains in late trading as the dollar retreated against its peers. A weaker U.S. currency boosts the appeal of dollar-denominated assets.
Saudi Arabia, the world’s biggest crude exporter, pumped 9.78 million barrels a day in February, according to a Bloomberg News survey. OPEC’s daily output fell to 32.17 million barrels last month, a 65,000-barrel-a-day drop from January, the first month of the accord, largely because the kingdom went beyond its target.
“The market is hemmed in,” Gene McGillian, manager of market research for Tradition Energy in Stamford, Connecticut, said by telephone. “This morning there was support from news that Saudi Arabia cut supply again, while data yesterday showing Russia output was flat put pressure on prices. Longer term, I believe reduced supply and higher demand will move us higher — but we aren’t there yet.”
See also: Leaner, fitter, faster: U.S. shale oil 2.0 challenges OPEC again
Crude inventories in the U.S. rose to 520.2 million barrels last week, the most in data going back to 1982, the Energy Information Administration reported Wednesday. Crude output climbed to 9.03 million barrels a day, the highest since March 2016. U.S. oil rig count rose by seven to 609 this week, the highest since October 2015, according to Baker Hughes Inc. data.
- Iraqi oil shipments of about 105,000 barrels a day were halted briefly on Thursday after Kurdish troops seized control of a pumping station in the disputed Kirkuk province and demanded that crude shipments to the country’s central government be stopped.
- Vitol Group BV is offering to sell Nigerian crude oil from a storage terminal in South Africa, five traders familiar with the matter said, in what may be a signal that the global supply glut is beginning to ease.
- Nigeria’s Economic and Financial Crimes Commission charged Royal Dutch Shell Plc and Eni SpA with making a corrupt payment of $801 million in 2011 related to the purchase of oil prospecting license, documents show.