Oil prices rose on Friday. Benchmark Brent was on track to end the week up over 3 per cent after a drop of over 8 per cent last week.
Oil prices up as US dollar hits lowest since 2014
Oil prices rose on Friday on a rebounding global equities market and a weaker US dollar as well as comments made by the UAE energy minister concerning a long-term alliance between OPEC pact members.
By 1:08 p.m. EST, Brent crude was up 68 cents to $65.01/barrel and was on track to close out the week up over 3 per cent after last week’s decline of 8 per cent. US WTI rose 50 cents to $61.67/barrel after touching a one-week high of $61.89. WTI is set to gain about 4 per cent after a drop last week of almost 10 per cent.
The Canadian Crude Index rose to $35.14.
“Equities and the dollar are propping things up for now,” Jim Ritterbusch, president of Ritterbush & Associates told Reuters.
According to Reuters, world shares are on track for their best week of gains in six years after two losing weeks and the US dollar hit its lowest level since 2014.
Oil prices were also underpinned by comments made by United Arab Emirates’ Energy Minister Suhail Al Mazrouei on Thursday. Al Mazrouei said that by the end of 2018, a super group of oil producing countries are expected to have a plan in place to institutionalize the OPEC supply cut agreement.
Since January 2017, 24 oil producing nations, including a number of OPEC members and Russia, have cut their production by a total of 1.8 million barrels per day. The twice-extended deal is currently set to expire at the end of 2018.
The deal’s impact on the oil market has been offset by rising US production which hit a record 10.27 million barrels per day (b/d) last week, according to the US Energy Information Administration. Moving ahead of Saudi Arabia but still behind Russia, the US is now the second largest crude producer in the world.
In the budget deal approved in the US last week, crude producers will benefit from a tripling of a tax credit for injecting carbon dioxide back into the earth to boost output.
Baker Hughes released its rig count on Friday. In the United States, the oil rig count rose by seven rigs to sit at 798. This time last year, there were 597 oil rigs in operation in the US. In Canada, the rig count fell by three rigs and now sits at 218, 24 oil rigs more in operation than at this time last year.
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