(Bloomberg) -- Oil posted its first weekly increase since last month as rebounding equity markets eased concern about economic growth and a weakening dollar boosted the allure of commodities priced in the U.S. currency.
Futures in New York rose 0.6 percent on Friday and gained 4.2 percent this week. The greenback touched a three-year low earlier in the day before edging higher, though the increase wasn’t enough to wipe out the previous four days’ losses. Equity markets recovering from recent routs boosted confidence in bullish energy demand forecasts.
“Oil prices were strong because the stock market stabilized,” said Phil Flynn, senior market analyst at Price Futures Group. “As long as we are going to see stock market stability, oil prices are going to look pretty good.”
New York oil futures started 2018 with the best January in more than a decade, but all those gains were wiped out last week as collapsing equity markets stoked concern about economic growth. At the same time, U.S. shale production has continued to escalate, imperiling the Organization of Petroleum Exporting Countries’ efforts to drain a global glut.
West Texas Intermediate crude for March delivery added 34 cents to settle at $61.68 on the New York Mercantile Exchange.
Brent for April settlement climbed 51 cents to close at $64.84 on the London-based ICE Futures Europe exchange. The global benchmark rose 3.3 percent this week.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was on track for a 1.4 percent decline this week. In equities, the S&P 500 Index and the Dow Jones Industrial Average were both poised to end the week up by more than 4 percent.
“This week, the dollar index starts trading lower and it has put a bid into the crude oil market, which is now trading relatively to a couple of weeks ago at high levels,” said Bob Yawger, director of futures division at Mizuho Securities.
Other oil-market news:
- Heating oil for March delivery rose 1 percent to $1.9104 a gallon in New York.
- Working rigs drilling for American crude rose by seven this week to 798, the highest since early 2015, when the rout that later evolved into the market’s worst collapse in a generation began entering a “false dawn” rally.
- Eni SpA pumped a record amount of oil and gas at the end of 2017, capitalizing on higher crude prices to significantly exceed profit estimates.
- America’s booming crude production is bypassing its biggest storage hub, with supplies at Cushing, Oklahoma, having nearly halved since November to stand at a three-year low.
- Ecuador’s 2017 crude exports fell for the third consecutive year to the lowest since 2012, according to the country’s central bank data.
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