Oil prices settled mostly flat after a volatile session, after data showed that the US rig count remained flat this week, but fell more than 7% for the week, their biggest weekly decline since March.
Light sweet crude for August delivery slipped 4 cents or 0.2% to end at $52.71 a barrel on the New York Mercantile Exchange. Based on the most active contracts, the US benchmark settled 7.4% lower for the week.
Brent for August delivery, the global benchmark, edged up 12 cents or 0.2% to about $58.73 a barrel on the London based Ice Futures Exchange. The contract ended 2.9% lower on the week.
The oil market was boosted by a rally in Chinese equities after Beijing put into place measures to halt a decline in the country’s stocks after two weeks of gyrations.
The rally in Chinese stocks moved to reassure traders after worries that the slowdown in the world’s second largest consumer of crude would impact crude demand.
Also aiding the rally was increased optimism that a bailout deal over Greece would be reached after the country presented a third proposal with significant concessions hoping to get $59 billion to help cover for its loans up to 2018.
“The prospects on a Greece bailout are encouraging but we’re down on anticipation that an Iran deal may also get done,” David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington, told Reuters.
Market sentiment was also raised by news that the deadline for the talks between Iran and the world powers over curtailment of its nuclear program in exchange for lifting economic sanctions against it had been pushed to Monday.
The rally was however capped by a slump in gasoline prices and a warning from the International Energy Agency that weaker crude demand would continue to pull it lower.,
“The bottom of the market may still be ahead,” Bloomberg reports the agency, which advises 29 industrialized nations on energy policy, saying.
“Non-OPEC supply growth is expected to grind to a halt in 2016 as lower oil prices and spending cuts take a toll.”
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