By Barani Krishnan
Investing.com - The good news is flowing in from all corners for oil bulls. Trade talks in Beijing, outage at the biggest Saudi oilfield and commodities merchant Trafigura's apparent decision to halt trading in Venezuelan crude are all combining to create the largest weekly gain for oil this year.
"Oil looks so bullish that it will probably fall again to just abuse us with irony," Scott Shelton, energy futures broker at ICAP (LON:NXGN) in Durham, N.C., said, cautioning that producer "flows," or selling, were continuing to rise, which could be a deterrent for higher prices.
The only bearish news for the day, if any, was a tick higher in the U.S. oil rig count published by Baker Hughes. The count rose by 3 after the previous week's 7-unit rise. Just two weeks ago, the rig reading was at a nine-month low of 847.
New York-traded West Texas Intermediate crude and London's Brent oil were each up for a fourth-straight day on Friday, rising around 6% on the week to recoup all of the losses from the previous week, which, incidentally, was the worst week for oil since 2019 began.
WTI settled up $1.18, or 2.2%, at $55.59 per barrel, the highest closing price for U.S. since Nov. 19. The peak for the day was $55.80.
Brent, the global oil benchmark, was up $1.80, or 2.8%, at $66.37 per barrel, smashing the key $65 resistance. Its intraday peak was $66.38.
For the week, WTI was up almost 6% while Brent rose nearly 7%. Year-to-date, U.S. crude gained 22% while the U.K. benchmarks rose 23%.
Gains in oil accelerated on reports that talks between the United States and China, the world's largest economies, will continue next week in Washington. Both sides cited good progress at this week's negotiations in Beijing. The market has been on an uptrend since a Bloomberg report on Thursday that President Donald Trump was considering a 60-day extension to the March 1 deadline requiring China to reach a trade deal with the U.S. or risk having higher tariffs on $200 billion worth of goods.
Brent prices particularly got a boost on reports that Saudi Aramco has shut part of its more than 1-million-barrels-per-day Safaniyah offshore oilfield after a main power cable was cut by a vessel’s anchor. Brent's premium versus WTI is at just over $10, reaching 2017 highs.
Out of Geneva, Reuters reported that global commodities firm Trafigura has decided to stop trading oil with Venezuela due to U.S. sanctions on the OPEC nation's energy sector.
The decision will come as a blow to the Nicolas Maduro administration. His government has been trying to maintain its hold on Caracas and its state oil company PDVSA despite U.S. and widespread global opposition to its rule. Swiss-based Trafigura had a long-standing arrangement with PDVSA to take Venezuelan crude and, in exchange, supply the Latin American country with refined products.