Investing.com — U.S . crude futures fell sharply on Friday amid
ongoing concerns related to excessive supply, but still ended the
week up nearly 10% as the prospects of a potential output freeze
from four top producers boosted prices from near 13-year lows.
On the New York Mercantile Exchange, WTI crude for April
delivery wavered between $31.36 and $32.98 a barrel before settling
at $31.74, down 1.20 or 3.69% on the day. Despite Friday's decline,
U.S. crude futures have surged by more than 16% since falling to
$26.05 a barrel on February 11, their lowest level since 2003.
On the Intercontinental Exchange, brent crude for April delivery
traded between $32.69 and $34.45 a barrel, before closing at
$33.02, down 1.26 or 3.68% on the session. After dipping below $30
a barrel briefly last week, North Brent Sea futures have rallied
more than 8%.
Meanwhile, the spread between the international and U.S.
domestic benchmarks of crude stood at $1.28 at Friday's close.
Oil prices retreated on Friday, as investors expressed
skepticism that a deal brokered by Saudi Arabia, Russia and two
other OPEC members to cap production at its January levels could be
completed. On Friday morning, Russia deputy-energy minister Alexey
Texler attempted to gain support for the deal by asserting that it
could reduce global oversupply by as much as 1.8 million barrels
per day (bpd). The pact, however, may require sufficient
cooperation from Iran, which has been resistant to slashing
production until its output returns to pre-sanction levels from
2007. While Iran oil minister Bijan Zanganeh said earlier this week
that he supported any measure that would help stabilize global oil
markets, he stopped short of committing to a freeze in Iranian
Saudi Arabia pumped 10.2 million barrels per day of oil in
January, while Russian production for the month hit a post-Soviet
high at 10.9 million bpd. Saudi crude output remains near a
record-high of 10.5 million bpd from last summer.
"If other producers want to limit or agree to a freeze in terms
of additional production, that may have an impact on the market,
but Saudi Arabia is not prepared to cut production," Saudi Arabia
foreign minister Adel al-Jubeir said in an interview with Agence
France-Presse on Thursday.
Investors also continued to digest a bearish inventory report
from the U.S. Energy Information Agency (EIA) from the previous
session. For the week ending on February 12, U.S. commercial crude
stockpiles rose by 2.1 million barrels to 504.1 million, remaining
near historically-high levels. At the Cushing Oil Hub, the main
delivery point for NYMEX oil, inventories increased by 36,000 on
the week, raising fears that the nation's largest storage facility
is nearing full capacity.
Elsewhere, oil-services firm Baker Hughes said in its weekly rig
count that oil rigs in the U.S. fell by 29 last week to 439,
marking the ninth straight week of weekly declines. The number of
oil rigs in the U.S. has fallen by more than 600 over the last
The U.S. Dollar Index, which measures the strength of the
greenback versus a basket of six other major currencies, fell more
than 0.20% to an intraday low of 96.93. With several hours left in
Friday's session, the index is on pace to close slightly higher for
Dollar-denominated commodities such as crude become more
expensive for foreign purchasers when the dollar appreciates.
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