Crude Oil Futures – Weekly Outlook: May 1 – 5
Oil futures settled a bit higher on Friday, but still registered a weekly and monthly loss as signs of further gains in U.S. crude output and doubts over whether OPEC will extend output cuts at its May meeting pressured prices.
The U.S. West Texas Intermediate crude June contract tacked on 36 cents, or around 0.7%, to end at $49.33 a barrel by close of trade Friday. It fell to its lowest since March 28 at $48.20 on Thursday.
The U.S. benchmark lost 35 cents, or almost 0.6%, on the week. For April, it fell around 3%, the second straight monthly decline.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery ticked up 23 cents to settle at $52.05 a barrel by close of trade. The global benchmark sank to $51.01 a day earlier, a level not seen since March 27.
For the week, London-traded Brent futures recorded a loss of 38 cents, or nearly 0.5%. The benchmark ended about 2% lower for the month.
Crude has been under pressure in recent weeks amid fears that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
U.S. drillers last week added rigs for the 15th week in a row, data from energy services company Baker Hughes showed on Friday, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 9 to 697, extending an 11-month drilling recovery to the highest level since August 2015. The relentless increase in U.S. output has overshadowed pledged output cuts by major producers.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Saudi Energy Minister Khalid al-Falih said on Friday that it was important to try and agree on an extension of a global oil cuts deal into the second half of the year with both OPEC and non-OPEC members.