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Oil Prices Head for Weekly Gains Ahead of U.S. Drilling Activity

Published 09/14/2018, 04:34 AM
© Reuters.  Oil recovers from sharp decline, on track for weekly gains ahead of U.S. rig count
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Investing.com - Oil prices recovered on Friday from the prior session’s sharp decline and remained on track for solid weekly gains as investors looked ahead to the latest gauge of U.S. production.

New York-traded West Texas Intermediate crude futures rose 41 cents, or 0.60%, at $69.00 a barrel by 4:29 AM ET (8:29 GMT).

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., gained 27 cents, or 0.35%, to $78.45.

Despite Wednesday’s sharp drop in crude prices, both barrels were still on track for weekly gains of 1.8% and 2.0%, respectively, as traders continue to evaluate global supply and demand.

Traders will focus Friday on the latest data on U.S. crude production from Baker Hughes.

The U.S. rig count, an early indicator of future output, rose by 2 to 862 last week, hovering near its highest levels since March 2015.

The International Energy Agency said Thursday that global crude supplies hit a record high in August.

The agency also warned that oil-demand growth could come under pressure as a stronger greenback could raise the cost of importing energy, while an "escalation of trade disputes" would likely be another headwind to demand growth.

Meanwhile, as part of America's continual effort to bring down oil prices in the face of November’s sanctions on Iran’s exports, the country’s energy secretary Rick Perry met with his Russian counterpart Alexander Novak in Moscow on Thursday, urging Novak to cooperate as leading energy producers to ensure global market stability. He told Novak that both countries are eager to keep the market competitive. He had met with Saudi Arabia officials earlier in the week. The three countries are the biggest producers of oil in the world.

After the Moscow meeting, Perry told journalists, “The [Saudi Arabia] kingdom, the members of OPEC that are opting their production to be able to make sure that the citizenry of the world does not see a spike in oil price…are to be admired and appreciated, and Russia is one of them.”

He added that the U.S., Russia and Saudi Arabia are working together to ensure accessibility to affordable energy.

Meanwhile, the Joint Technical Committee - composed of representatives from the Organization of Petroleum Exporting Countries and non-OPEC major producers led by Russia - is expected to meet on September 17 to consider proposals on distributing the agreed output increase of 1 million barrels per day.

OPEC, Russia and other non-members agreed in June to return to 100% compliance with oil output cuts that began in January 2017, after underproduction by some had pushed compliance above 160%.

According to the sources cited, there are four proposals on the table that will be discussed before being presented to ministers attending the next monitoring meeting on September 23 in Algeria.

In other energy trading, gasoline futures fell 0.13% to $1.9960 a gallon by 4:31 AM ET (8:31 GMT), while heating oil rose 0.22% to $2.2283 a gallon.

Lastly, natural gas futures traded down 0.32% to $2.808 per million British thermal units.

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