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Oil futures gave up earlier losses Friday to score a weekly rise, with U.S. prices settling at a fresh six-week high, as traders gauged expectations for energy demand against conflicting news tied to China-U.S. trade talks.
A weekly decline in the number of U.S. oil rigs actively drilling for oil provided some support to oil Friday, said Tariq Zahir, managing member at Tyche Capital Advisors.
Data released Friday from Baker Hughes Co. BKR, +0.72% pointed to a further slowdown in oil drilling activity, with the number of active U.S. rigs drilling for oil down a third consecutive week. The number fell by 7 to 684 this week, down 202 from a year ago.
Against that backdrop, West Texas Intermediate crude for December delivery CLZ19, +0.44% rose 9 cents, or 0.2%, to settle at $57.24 a barrel on the New York Mercantile Exchange after trading as low as $55.76 during the session. Front-month contract prices settled at their highest since Sept. 24, according to Dow Jones Market Data. For the week, U.S. benchmark oil prices rose almost 1.9%.
January Brent crude BRNF20, +0.16%, the international benchmark, climbed 22 cents, or 0.4%, to $62.51 a barrel on ICE Futures Europe, following a 0.9% gain on Thursday. For the week, Brent rose 1.3%.
“Conflicting signals over when the United States and China will agree on a deal to end 18 long months of trade disputes and uncertainty” had pressured prices early Friday, said Lukman Otunuga, senior research analyst at FXTM.
“Although markets remain cautiously optimistic over a trade deal on the horizon, conflicting signals from both sides could weigh on global sentiment and investor confidence,” he told MarketWatch. “Given how oil markets remain heavily influenced by growth concerns and fears of falling demand for oil, further downside could be on the cards if trade hopes falter.”
Reports Thursday and Friday signaled that there was “fierce internal opposition” in Washington over a new accord with Beijing to cancel tariffs in stages. Trade conflicts between the world’s largest economies have been at the heart of concerns about demand for crude amid a global slowdown.
On Friday, President Donald Trump told reporters that he hasn’t yet agreed to remove tariffs on Chinese goods.
On top of that, recent inventory reports indicate that supplies are rising faster than uptake.
The Energy Information Administration on Wednesday reported that U.S. crude supplies rose a second straight week, up 7.9 million barrels for the week ended Nov. 1.
“Oil seems like it could be stuck in a range until we get a final phase-one trade deal and get passed the December 5-6th OPEC + meetings,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a note, referring to the gathering of the Organization of the Petroleum Exporting Countries and major suppliers like Russia set to take place next month.
On Nymex Friday, December gasoline RBZ19, -0.03% declined by 0.1% to $1.6337 a gallon, with prices ending about 1.3% lower for the week, while December heating oil HOZ19, +0.02% lost 0.1% to $1.9181 a gallon, for a weekly loss of 0.8%.
December natural gas NGZ19, +0.65% settled at $2.789 per million British thermal units, up 1.7 cents, or 0.6%, on Friday, after losing 2% a day earlier. For the week, prices logged a rise of 2.8%.
“From April 1 through October 31, 2019, more than 2,569 [billion cubic feet] of natural gas was placed into storage in the Lower 48 states,” the EIA said in a report Friday. “This volume was the second-highest net injected volume for the injection season, falling short of the record 2,727 Bcf injected during the 2014 injection season.”
