Oil gains in weekly recovery on equities rebound, weak dollar
FILE PHOTO - Pump jacks drill for oil in the Monterey Shale, California, U.S. on April 29, 2013. REUTERS/Lucy Nicholson/File Photo
By Ayenat Mersie
NEW YORK (Reuters) - Oil prices edged up on Friday as a rebound in the global equities market and a weak dollar supported crude's recovery from last week's slide.
Global stocks rallied for a sixth straight session to post their best week in more than two years. The dollar <.DXY> rose on the day but remained on track to post its biggest weekly loss in nine months. A weaker dollar can boost oil and other dollar-denominated commodities. [FRX/] [MKTS/GLOB][USD/]
"I don’t want to underestimate what the dollar is doing. The weaker dollar has been extremely supportive to crude," said Bill Baruch, president and founder of Blue Line Futures.
Brent crude futures
U.S. West Texas Intermediate crude
Money managers slashed their bullish wagers on ICE Brent crude oil futures by the most in nearly eight months in the week to Feb. 13, data showed, as prices plunged amid concerns of oversupply.
Speculators also cut net long U.S. crude futures and options positions in the week to Feb. 13 by the most since late August, the U.S. Commodity Futures Trading Commission (CFTC) said. [CFTC/]
"After such a sharp drop that we saw prior to Wednesday, perhaps a recovery was due," said Tony Headrick, an analyst at CHS Hedging LLC.
"However, you look at rig counts ... with the number of U.S. oil rigs increasing by seven, that’s a point that should cap an extreme advance in prices," Headrick said.
The U.S. oil rig count, an indicator of future production, rose seven to 798, its highest in three years, according to a weekly report from General Electric's Baker Hughes unit. [RIG/U]
Surging U.S. production is offsetting those efforts by the Organization of the Petroleum Exporting Countries and some other producers including Russia to curb production by 1.8 million barrels per day (bpd) till the end of 2018.
U.S. crude output hit a record 10.27 million bpd last week, the Energy Information Administration said, making it a bigger producer than Saudi Arabia.
A little-noticed addition to the U.S. budget deal approved last week was also expected to further boost U.S. crude production by more than tripling a tax credit to producers for injecting carbon dioxide back into the earth to increase output.
(Reporting by Ayenat Mersie, additional reporting by Dmitry Zhdannikov and Osamu Tsukimori; Editing by Marguerita Choy and Chizu Nomiyama)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Oil prices jump over 3%, near $90 on reports of explosions in Iran
- Gold prices rally past $2,400 on reports of Israel strikes on Iran
- Oil settles down 3% as demand worries outweigh Middle East supply risks
Create E-mail Alert Related Categories
Commodities, ReutersRelated Entities
Crude OilSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!