New York: Brent oil posted its first weekly loss in a month on Friday as the market fretted again about global oversupply while US crude rose for an eighth straight week, helped by jobs growth data and the first storm of the hurricane season forming.
Crude prices had rallied with little pause over the past month, helped by a weaker dollar and bets that better demand in the near term will ease the supply glut.
But on Thursday, prices fell as much as 3 per cent, their most since early April, after hitting 2015 highs. Oil was also pressured by a stronger dollar and physical oil markets showing tens millions of West African, Azeri and North Sea crude barrels without buyers.
In Friday’s session, Brent, the more globally-used benchmark for oil, settled down 15 cents, or 0.2 per cent, at $65.39 a barrel. It was down 1.6 per cent on the week. Brent had risen previously in four consecutive weeks, gaining nearly 20 per cent.
US crude rose 45 cents, or 0.8 per cent, for the session to settle at $59.39 a barrel. It climbed 0.4 per cent on the week, extending gains for an eighth straight week that had put the market up 32 per cent.
Some analysts doubted the market could press on without correction.
“We can see some downside acceleration next week and we are leaving a $40 price handle on the table,” said Jim Ritterbusch of Ritterbusch and Associates in Galena, Illinois.
Brent slipped after early support from record high crude imports in China in April. Traders cautioned that low prices could encourage China to stockpile, adding to global inventories.
Trading also turned choppy on the realization that last week’s drawdown in US inventories was at the expense of builds in gasoline and distillates.
“Products inventories were up, so it looks like the crude is just being turned into products” without corresponding demand, said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
Still, US crude sidestepped those concerns to rise on higher nonfarm payrolls in April.
Also supportive to the market was news that Ana, the first named storm of the Atlantic hurricane season which traditionally begins June 1, had formed off the coast of South Carolina..
US crude also stayed resilient despite this week’s drop in the country’s oil rig count, a measure for future output, being the smallest in a month.