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Crude oil futures - weekly outlook: May 23 - 27

Published 22/05/2016, 07:03 pm
© Reuters.  Oil futures settle lower, but gain more than 3% for the week
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Investing.com - Oil futures ended lower on Friday, but still posted a second consecutive week of gains amid mounting concerns over global supply disruptions.

On the ICE Futures Exchange in London, Brent oil for July delivery shed 9 cents, or 0.18%, to end the week at $48.72 a barrel. Despite Friday’s modest decline, London-traded Brent futures rose 92 cents, or 1.86%, on the week.

On Wednesday, Brent prices jumped to $49.88, a level not seen since November 4, as unplanned supply disruptions in Nigeria, Libya, Venezuela and Canada eased concerns over a global glut.

Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in July dipped 26 cents, or 0.53%, to settle at $48.41 a barrel. For the week, however, New York-traded oil futures picked up $1.47, or 3.33%.

Nymex prices rallied to $49.56 on Wednesday, the most since October 12. U.S. crude futures are up nearly 80% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment.

Oilfield services provider Baker Hughes said late Friday the number of rigs drilling for oil in the U.S. was unchanged at 318 in the latest reporting week, after eight straight weeks of declines.

However, analysts warned that market conditions remained weak due to an ongoing glut. According to the U.S. Energy Information Administration, crude oil inventories unexpectedly rose by 1.31 million barrels last week to 541.3 million.

Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at 31 cents at Friday’s settlement, compared to a gap of 14 cents by close of trade on Thursday.

In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.

Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Tuesday, May 17

The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, May 18

The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.

Friday, May 20

Baker Hughes will release weekly data on the U.S. oil rig count.

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