US crude rises 34 cents, settling at $61.68, breaking two-week losing streak with 4.2% gain

Oil prices stood near a one-week high on Friday as global equities headed for their biggest weekly gain in six years as the dollar slipped to a three-year low.

U.S. West Texas Intermediate crude for March delivery ended Friday’s session up 34 cents at $61.68 a barrel. For the week, the U.S. crude contract rose 4.2 percent after losing nearly 10 percent last week.

London Brent crude rose 37 cents to $64.70 by 2:03 p.m. ET, on track for a roughly 3-percent weekly gain after falling more than 8 percent last week.

“Oil is getting support from a rebound in global stock markets and a weak dollar, but the upside is limited due to a projection for rising U.S. production,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

The dollar slipped to a three-year low against a basket of currencies on Friday but later regained some ground. A weaker dollar often boosts oil and other dollar-denominated commodities.

World shares were set to post their best week of gains in six years after two consecutive weeks in the red. Activity was subdued as many Asian markets were closed for the Lunar New Year holiday.

Also supporting oil prices was a statement from the United Arab Emirates energy minister late on Thursday saying oil producers led by Saudi Arabia and Russia aimed to draft an agreement on a long-term alliance by the year end.

OPEC and some non-OPEC producers including Russia have been restraining production by 1.8 million barrels per day (bpd) to prop up prices. The arrangement expires at the end of 2018.

The move comes at a time when Asian demand is on the rise.

India imported a record 4.93 million bpd in January to feed its expanded refining capacity and meet rising demand, data showed.

Oil won support earlier in the week after Saudi Energy Minister Khalid al-Falih said OPEC hopes to keep limiting crude output to leave the market tight.

However, surging U.S. production is offsetting those efforts. U.S. crude output hit a record 10.27 million bpd last week, the Energy Information Administration said on Wednesday. The United States is now a bigger producer than Saudi Arabia.

U.S. drillers added 7 oil rigs in the latest national count kept by oilfield services firm Baker Hughes. The count has risen by 51 oil rigs in the last four weeks, putting the total at a nearly three-year high of 798.

“Drilling activity in the U.S. continues to pick up … Adding to this, producers appear to be more efficient than they were mid last year,” ING said in a note, adding that rising U.S. supplies and the liquidation of speculative longs were likely to keep oil prices under pressure. Source: Reuters