Oil prices rose on Friday, snapping a week-long decline as investors closed positions at the end of a volatile week that saw prices slide nearly 10% on renewed signs a global supply glut was here to stay.
Brent crude’s new front-month December contract was up 60 cents at $50.33 a barrel. November Brent expired at $48.71 on Thursday, down 44 cents on the day, Reuters reported. US crude’s front-month November contract traded 99 cents higher, or 2.13%, at $47.37 a barrel.
Strong equity markets also supported gains as European shares reached a two-month high, buoyed by bullish Asian and US trading on positive US economic data. Despite making slight gains on Friday, US crude was set for its steepest weekly loss in 10 weeks and Brent in eight weeks, after the International Energy Agency predicted the market would remain oversupplied through 2016.
“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.Some investors pinned hopes for a price revival on forecasts of falling US shale oil production, with output expected to drop the most on record in November, according to the US Energy Information Administration.
Societe Generale analyst Jesper Dannesboe said crude oil was likely to continue range-trading over the coming months. “We see limited further downside for risk-reversals unless a major geopolitical event takes place,” he said. A meeting of OPEC technical experts in Vienna on October 21 may give indications whether sentiment is shifting within the organization about maintaining production levels as prices remain muted.
Non-OPEC oil producer Azerbaijan confirmed on Friday it had been invited to the meeting but its energy minister would not attend.
