NEW YORK (Reuters) – Oil prices edged higher on Friday as a rebound in the global equities market and a weak dollar supported crude’s recovery from last week’s slide.
FILE PHOTO – Pump jacks drill for oil in the Monterey Shale, California, U.S. on April 29, 2013. REUTERS/Lucy Nicholson/File Photo
Brent crude LCOc1 was up 57 cents, or 0.8 percent, at $64.90 per barrel by 11:17 a.m. EST (1617 GMT). The global benchmark was on track to end the week up more than 3 percent after a decline of more than 8 percent last week.
U.S. West Texas Intermediate crude CLc1 rose 29 cents to $61.65, having touched a one-week high of $61.89. WTI was set for a weekly gain of about 4 percent after losing nearly 10 percent last week.
“Equities and the dollar are propping things up for now,” said Jim Ritterbusch, president of Ritterbush & Associates.
World shares were set for their best week of gains in six years after two consecutive weeks in the red, while the dollar hit its lowest since 2014.
The dollar slipped to a three-year low against a basket of currencies .DXY on Friday but later regained some ground to trade 0.3 percent higher, limiting gains in the oil market. A weaker dollar often boosts oil and other dollar-denominated commodities. [USD/]
Also supporting oil prices was a statement from the United Arab Emirates energy minister late on Thursday saying oil producers led by Saudi Arabia and Russia aimed to draft an agreement on a long-term alliance by the end of the year.
The Organization of the Petroleum Exporting Countries and some other producers including Russia have been restraining production by 1.8 million barrels per day (bpd) to prop up prices. The arrangement expires at the end of 2018.
However, surging U.S. production is offsetting those efforts. U.S. crude output hit a record 10.27 million bpd last week, the Energy Information Administration said, making it a bigger producer than Saudi Arabia.
A little-noticed addition to the U.S. budget deal approved last week was also expected to further boost U.S. crude production by more than tripling a tax credit to producers for injecting carbon dioxide back into the earth to increase output.
The U.S. rig count, an early indicator of future output, last week jumped to its highest in three years. Data for this week was due at 1 p.m. [RIG/U]
“We’ll see what happens when the oil rig count comes out later today. That could influence how we finish the day, especially if we have another pop like we did last week,” said Ritterbusch.
Reporting by Ayenat Mersie additional reporting by Dmitry Zhdannikov and Osamu Tsukimori; Editing by Dale Hudson and Marguerita Choy