US crude oil prices staunched seven weeks of losses and climbed 33 cents on the week as they rallied before settlement due to short covering ahead of Tuesday’s contract of expiration.
The prices received strong support from the International Energy Agency (IEA) report, which stated that there were signs lower prices had started curbing production in certain places, such as North America.
Another Report that spurred another rally was that from the University of Michigan, on consumer sentiment being at its highest level for more than a decade because of job gains and low prices of gasoline.
John Kilduff, partner at Again Capital LLC said, “That Michigan number was significant. It’s a pretty good harbinger for the economy going forward.”
According to Reuters, WTI settled at $48.69 per barrel, up $2.44. Global Brent crude futures for March delivery settled at $50.17, up $1.90.
The bullish reports on production and consumer sentiment were beset by several headwinds, making for a volatile market, according to Tyche Capital Advisors’ Tariq Zahir.
He said, “Additionally, while reports may indicate increasing demand, the global supply glut is still outweighing it. Demand is on the increase, it’s still not catching up to supply.”
On Friday, the IEA said in its monthly report, “How low the market’s floor will be is anybody’s guess. But the sell-off is having an impact. A price recovery barring any major disruption- may not be imminent, but signs are mounting that the tide will turn.
According to Market Watch, BP PLC had announced earlier in the week that it would lay off around 300 people in the North Sea area of Aberdeen in Scotland.
Trevor Garlick, BP’s North Sea president said, “Given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust.”
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