US crude rises 1.2 percent, but posts weekly loss on supply concerns
Oil prices were mixed on Friday, with short-covering pushing up U.S. crude futures while Brent slipped on global trade tensions and increased Saudi production.
U.S. West Texas Intermediate crude futures ended Friday’s session up 86 cents, or 1.2 percent, to $73.80 a barrel. Global benchmark Brent was down 23 cents at $77.16 a barrel by 2:29 p.m.
For the week, WTI posted a loss of about a half a percent, while Brent was on track for a decline of about 3 percent.
“We have a little bit of a rally that’s materialized” for WTI, said Bob Yawger of director of energy futures at Mizuho in New York. The rally appears to be a “short covering situation — we were down almost 2 percent yesterday,” said Yawger.
U.S. crude futures slipped on Thursday after data showed an unexpected 1.3 million-barrel build in crude inventories.
Brent, meanwhile, was “still having difficulty gaining independent bullish traction,” said Jim Ritterbusch, president of Ritterbusch and Associates in a note.
“Increased Saudi crude availability that is being enhanced by reduced OSPs (official selling prices) into Europe and other regions is providing a strong counter against curtailed Libyan export activities,” Ritterbusch wrote.
In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by almost 500,000 barrels per day last month.
Output cuts by OPEC and allies since January 2017 have reduced a crude glut.
Involuntary drops in supply in Venezuela, Angola and Libya have made the cutbacks even bigger, although OPEC — led by Saudi Arabia — has since agreed to a modest increase in output.
“The more that Saudi Arabia adds to the market, the less of a supply cushion we have — that’s a bullish twist to a bearish development,” said Yawger at Mizuho.
An imminent shift in global oil trade flows was also affecting prices.
