Oil Heads for Biggest Weekly Gain Since 2017 as Saudis Pump Less-
Brent crude headed for its biggest weekly gain since July 2017 as hints that OPEC’s production cuts outweighed concerns over the health of the global economy.
The global benchmark is on track for an 9.3 percent advance this week after rebounding Friday from earlier losses. Prices have rallied on speculation that Saudi Arabia slowed pumping even before OPEC’s deal to reduce output went into effect. That’s added to bullish sentiment from progress in trade talks between the world’s biggest economies and helped offset wider stock market turmoil driven by fears of a slowdown in China.
Oil’s positive start to 2019 follows its worst quarter in four years and a 20 percent annual loss driven by panic over a growing glut of crude. While OPEC’s output plunged by the most in almost two years last month and producers have pledged to curb supplies through the first half of 2019, concerns about the oversupply prevail as stockpiles at America’s main storage hub show signs of swelling.
“While crude seemed to have bottomed out and is expected to edge higher, there’s a possibility for additional drops along the way, driven by seasonal factors and risks from wider financial markets,” said Hong Sungki, a commodities trader at NH Investment & Securities Co. in Seoul. “Still, oil rebounded yesterday, shaking off the slump in equities, which is an encouraging sign.”
Brent for March settlement rose as much as $1.11, or 2 percent, to $57.06 a barrel on the ICE (NYSE:ICE) Futures Europe exchange, after earlier falling as much as 1.1 percent. The benchmark crude was at $57 a barrel at 8:13 a.m. in London.
West Texas Intermediate for February delivery rose $1.04, or 2.2 percent, to $48.13 a barrel on the New York Mercantile Exchange. Prices are up 6.2 percent this week, the most since June. The March contract traded at a discount of $8.68 to Brent.
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