Oil Futures Edge Higher Friday

WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled higher on Friday, recouping some of the hefty losses from Thursday's plunge that sent front-month West Texas Intermediate and Brent crude futures to two months lows.

WTI rebounded 1.4% on Friday following the worst one-day drop of 2019 as fears over the health of global economy tied to U.S.-China trade tensions sent equities and oil markets sharply lower Thursday. Markets were unnerved Thursday by comments from the Chinese commerce ministry, which said the country would not resume trade talks with the United States until the latter adjusts its wrong actions. The Dow Jones Industrial plunged more than 400 points on the news, but Friday posted modest gains ahead of long Memorial Day weekend.

Oil futures were also battered midweek after the Energy Information Administration released a bearish inventory report showing U. S. crude stocks rose 4.7 million barrels (bbl) in the week-ended May 17 to a 20-months high. Supply data also showed gasoline inventories increased an unexpected 3.7 million bbl last week, suggesting lagging demand just ahead of the U.S. driving summer season.

EIA also reported U.S. crude production increased 100,000 barrels per day (bpd )to 12.2 million bpd, holding below a record 12.3 million bpd registered in late April, and following a re-benchmarking of U.S. crude output earlier this month that lowered the production rate by 200,000 bpd.

Baker Hughes data for the week showed the number of active oil rigs in the U.S declined for a third consecutive week, falling below 800 count for the first time since the final week of March 2018. This week the rig count fell five to 797, while a total of eight rigs were taken out of service in May.

NYMEX July WTI futures settled up $0.72 at $58.63 bbl after trading at 10-week low in the previous session.

ICE July Brent futures settled up $0.93 at $68.69 bbl, with Brent premium to WTI widening to a four-month high at $10.06 bbl.

NYMEX June RBOB futures recovered 2.12 cents to settle at $1.9345 a gallon, after falling to a better than seven-week low on Thursday. NYMEX June ULSD futures settled 0.89 cents higher at $1.9713 a gallon.

Liubov Georges can be reached at liubov.georges@dtn.com