NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures snapped a five-day losing streak and settled higher Friday afternoon although the complex posted its biggest one-week loss since early March.
After plunging to better than five-month lows during overnight trade, oil futures recovered in midsession amid a pre-weekend short-covering rally stoked by overbought market conditions and a solid monthly U.S. jobs report.
Assurances by Saudi Arabia that Russia was ready to join the members of the Organization of Petroleum Exporting Counties in extending current 1.8 million bpd in production cuts thru the rest of the year boosted the market as well, although the upside was curbed by fresh industry data showing the 16th consecutive weekly increase in the number of rigs deployed to the U.S. oil patch.
"The market was technically oversold after yesterday's long liquidation and I think we've almost hit the bottom," said Phil Flynn, an analyst at Price Futures.
Other analysts also noted the forward curve for West Texas Intermediate crude futures contract is not as steep as it once was, which suggests oil prices are now at the lower end of a bearish price-range.
"The selling pressure behind the recent [oil futures] decline may have been exhausted," said analyst Tim Evans at Citi Futures. "Bargain hunting from those representing the drop as a buying opportunity and short-term profit taking ahead of the weekend may have helped to arrest the decline at least for now."
The NYMEX June WTI futures contract settled 70cts higher at $46.22 bbl after reversing off a $43.76, 5-1/2-month low on the spot continuation chart, with $40.65 support remaining intact. The contract lost 6.3% for the week.
IntercontinentalExchange July Brent crude oil futures settled up 72cts at $49.10 bbl, reversing off a $46.64 fresh five-month spot low, and posted a 5.1% weekly loss. In arbitrage trade, the Brent contract rose 48cts on the week to close at a $2.88 premium over WTI.
NYMEX June ULSD futures gained 2.43cts to a $1.4366 gallon settlement, reversing off a better than 5-month spot low of $1.3748 to close the week down 4.5% on the week. The June RBOB futures contract settled 2.34cts higher at $1.5046 gallon, reversing off a $1.45, 5-1/2-month spot low and posting a 2.8% loss on the week.
In its latest report, oil services firm Baker Hughes, Inc. today said the number of active oil rigs in the U.S. rose by six to 703 this week, marching higher for the 16th consecutive week to the highest count since Apr. 24, 2015.
Since the start of 2017, the industry has added 178 rigs drilling for oil and 229 since Nov. 30, 2016 when OPEC agreed to cut production by 1.2 million bpd.
The oil market also was boosted by a weaker dollar, with the greenback falling to a six-month low after the Labor Department reported 211,000 private sector jobs were created last month and the unemployment rate fell to 4.4%, indicating a strong economy that could boost oil demand during the summer months.
George Orwel can be reached firstname.lastname@example.org