© Reuters. Oil books a weekly loss of just over 9% amid glut concerns
Investing.com – Oil futures settled at the lowest level since the end of November on Friday, booking a weekly loss of around 9% as concern over rising shale production and record-high U.S. crude inventories offset optimism that OPEC and its allies have been following through on their commitment to cut production.
The April contract touched a session low of $48.31 a barrel on Friday, a level not seen since November 30. It was last at $48.49 by close of trade, down 88 cents, or about 1.8%.
The U.S. benchmark lost $4.84, or almost 9%, on the week, its biggest weekly drop in five months.
Elsewhere, on the ICE Futures Exchange in London, for May delivery slumped 82 cents, or about 1.6%, to settle at $51.37 a barrel by close of trade. The global benchmark fell to $51.14 earlier, its cheapest since November 30.
For the week, London-traded Brent futures recorded a loss of $4.53, or 8.1%, the fifth straight weekly decline.
Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand pressured crude prices.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil last week, the eighth weekly increase in a row. That brought the total count to 617, the most since October 2015.
Meanwhile, the U.S. Energy Information Administration said on Wednesday that jumped by 8.2 million barrels last week to yet another all-time high of 528.4 million. It was the ninth straight weekly build in U.S. stockpiles, feeding concerns about a global glut.
Oil prices have been trading in a narrow $5 range around the low-to-mid-$50s over the past three months as sentiment in oil markets has been torn between rising stockpiles and increased shale production in the U.S. and hopes that oversupply may be curbed by output cuts announced by major global producers.
OPEC and non-OPEC countries made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, but so far the move has had little impact on inventory levels.
Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.
Elsewhere on Nymex, for April shed 2.4 cents, or about 1.5% to $1.600 on Friday. It ended down about 3.2% for the week.
April inched down 2.5 cents, or 1.7%, to finish at $1.503 a gallon, the lowest since November 30. For the week, the fuel lost roughly 5.7%.
for April delivery rose 3.4 cents, or almost 1.2%, to $3.008 per million British thermal units. It posted a weekly gain of 6.4%.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, March 14
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, March 15
The International Energy Agency will release its monthly report on global oil supply and demand.
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, March 16
The U.S. government is to produce a weekly report on natural gas supplies in storage.
Friday, March 17
Baker Hughes will release weekly data on the U.S. oil rig count.