NEW YORK : Oil rebounded more
than 2 percent on Friday after falling for five straight session as a major
U.S. crude pipeline was shut and traders anticipated an OPEC deal to extend
curbs on production.
Prices, however, fell for the
first week in six, pressured by rising U.S. output data and doubts that Russia
would support an extension of the OPEC output cut deal. Prices rebounded after
Thursday's comments by Saudi Arabia's energy minister signaled a willingness to
extend output cuts when OPEC meets on Nov. 30.
"Obviously, the comments
gave us guarantee that the extension is going to happen and was a driving story
overnight," said Phil Flynn, an analyst at Price Futures Group in Chicago.
"Globally, we're coming
against the backdrop of tightness in distillate inventories and strong global
refinery demand. Those catalysts will continue to drive us higher."
Brent crude oil LCOc1 rose $1.36,
or 2.2 percent, to settle at $62.72 a barrel while U.S. West Texas Intermediate
crude (WTI) CLc1 ended $1.41, or 2.6 percent, at $56.55 a barrel.
For the week, Brent was down 1.3
percent and WTI fell 0.3 percent.
TransCanada Corp's 590,000
barrel-per-day (bpd) Keystone pipeline remained shut after a leak in South
Dakota on Thursday.
Traders said the shut-in would
add to bullish sentiment due to fewer barrels going into Cushing, Oklahoma, the
delivery point of the WTI contract. The WTI prompt spread narrowed by as much
as 7 cents in the day.
Meanwhile, money managers raised
their net long U.S. crude futures and options positions this week, with short
positions at their lowest level since March.
Prices fell this week as fears of
oversupply remained after U.S. government data showed oil output touching a
record 9.65 million bpd last week. The International Energy Agency also said
that the United States would account for 80 percent of the global increase in
oil production over the next decade.
"Market participants are
closely watching the rising oil-production profile in the U.S., which will
remain the predominant bearish factor," said Abhishek Kumar, senior energy
analyst at Interfax Energy's Global Gas Analytics in London.
U.S. energy companies kept the
oil rig count unchanged this week, General Electric Co's Baker Hughes energy services
firm said on Friday. Some analysts expect a gradual decline in the fourth
quarter.
Signs of rising U.S. output have
dampened the impact of output cuts by the Organization of the Petroleum
Exporting Countries (OPEC), Russia and several other producers.
Earlier this week, Russia's
Rosneft said an exit from the supply curb deal was a serious challenge, though
added that it was committed to a deal.
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