Crude futures traded near $50 a barrel on both sides of the Atlantic after the biggest quarterly gain since 2009.
Futures rose Friday after climbing 26% in New York and 25% in London during the three months ended June 30. Global markets have been in turmoil since the U.K.’s vote to leave the European Union on June 23. U.S. crude supplies shrank a sixth week and production slipped to the lowest since September 2014, government data showed Wednesday.
Supply disruptions and falling U.S. output have pushed prices up more than 75% from 12-year lows early this year. Canada restored production as wildfires eased and Nigeria agreed to a tentative cease-fire with militants. While pledges from central banks have halted a rout in global markets following the British decision to break with the EU, both the International Energy Agency and OPEC forecast the oil market is heading toward a supply-demand balance.
“We’ve taken back more than half of the drop that followed the Brexit referendum,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “The market’s now in a holding pattern, trading within a couple dollars of $50. Attention will turn back to the fundamentals, such as rising Chinese and Indian growth, and the strong U.S. gasoline demand, which should bring the bulls back.”
West Texas Intermediate for August delivery rose 17 cents to $48.50 a barrel at 10:09 a.m. on the New York Mercantile Exchange. Futures are up 1.8% this week. The contract fell 3.1% to settle at $48.33 on Thursday. The total volume traded was 34% below the 100-day average.
Brent for September settlement advanced 10 cents to $49.81 a barrel on the London-based ICE Futures Europe exchange. The August contract fell 1.8% to $49.68 a barrel before expiring Thursday. The global benchmark crude was at a 66-cent premium to WTI for September delivery.
U.S. crude stockpiles fell to 526.6 million barrels, the lowest since the week ended March 11, the Energy Information Administration said. Supplies climbed to an 87-year high of 543.4 million barrels in the last week of April. Production slipped by 55,000 barrels a day to 8.62 million last week, the EIA said.
Norway is facing the first oil worker strike since 2012 as government-mediated talks for platform workers approach a Friday midnight deadline. Should the talks fail, more than 700 workers will walk off the job and shut about 6% of the oil and gas output in western Europe’s largest producer, according to the Norwegian Oil and Gas Association.
Oil Market News
Exxon Mobil’s oil discovery off the coast of Guyana may hold as much as 1.4 billion barrels, twice the size of the previous estimate, making it potentially worth about $70 billion based on current prices. Iraqi crude exports fell to 3.175 million barrels a day in June, according to the nation’s oil ministry. Shipments reached a record rate of 3.364 million barrels a day in April. Chevron may shortly give a green light to the most expensive oil project in the world this year. The company said this week in a presentation that a decision on expanding the Tengiz development in Kazakhstan will be made in mid-2016.