Source : Investing.com
Oil futures rose for the first time in seven sessions
on Friday, bouncing off four-week lows as a weaker U.S. dollar lent
support to the commodity and as concerns over a potential U.K. exit from
the European Union temporarily eased.
The dollar
fell 0.5% on Friday, retreating from a two-week high the day before.
Market sentiment recovered as concerns over a possible Brexit
temporarily subsided as traders tried to assess whether the killing of a
pro-EU British lawmaker may change the balance of opinions in Britain's
upcoming referendum on European Union membership.
On the ICE Futures Exchange in London, Brent oil for August delivery jumped $1.98, or 4.2%, to settle at $49.17 a barrel by close of trade on Friday. A day earlier, Brent prices dropped to $46.94, a level not seen since May 12.
Despite Friday’s gains, London-traded Brent futures lost $1.25, or
2.71% on the week, as global concerns over a potential Brexit weighed on
appetite for riskier assets.
A vote by Britain to leave the European Union may tip Europe back
into recession, putting more pressure on the global economy and
undermining future oil demand prospects.
Brent futures prices are nearly 7% below a 2016 high of $52.86 struck
earlier this month amid easing concerns over global supply disruptions.
Elsewhere, on the New York Mercantile Exchange, crude oil
for delivery in July advanced $1.77, or 3.83%, to end the week at
$47.98 a barrel. Prices dropped to $45.83 earlier, the lowest since May
13.
For the week, New York-traded oil futures slumped 87 cents, or 2.22%,
on signs of a potential recovery in domestic drilling activity.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by nine last week to 337, the third straight weekly rise.
The renewed gain in U.S. drilling activity fueled speculation that
domestic production could be on the verge of rebounding in the weeks
ahead, underlining worries over a supply glut.
U.S. crude futures are down almost 8% since hitting a 2016 high close
to $52 a barrel on June 9. Despite recent losses, Nymex oil prices are
still up nearly 80% since falling to 13-year lows at $26.05 in early
February. However, with prices now at levels that make drilling
economical for some firms, the rig count might start rising soon and the
decline in U.S. production may slow.
Meanwhile, Brent's premium to the West Texas Intermediate crude
contract stood at $1.19 at Friday’s settlement, compared to a gap of 98
cents by close of trade on Thursday.
In the week ahead, market players will be turning their full
attention to a highly anticipated referendum on whether Britain remains
in the European Union on Thursday.
Oil traders will also be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, June 21
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. crude supplies.
Wednesday, June 22
The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.
Thursday, June 23
The U.K. will vote on a referendum to decide if it continues to be a part of the European Union.
Friday, June 24
Baker Hughes will release weekly data on the U.S. oil rig count.
