Crude Ends a Bad Week With a Bump Higher as Tariff Panic Eases
(Bloomberg) -- Oil ended a bad week a little higher as the initial panic over President Donald Trump’s trade-wars threat eased somewhat.
Futures in New York rose 0.4 percent on Friday, erasing a morning slump and paring the weekly loss to about 3.6 percent. Trump tweeted that “trade wars are good, and easy to win” after announcing plans for tariffs on steel and aluminum, which roiled markets across the board. But a report on U.S. drilling showed the shale patch might be slowing down.
“For much of the day, we’ve followed the ups and downs of the equities market,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. The addition of just one oil rig this week “means that the future outlook for production in the U.S. is probably going to be less robust in growth than what we’ve seen recently.”
Oil has fallen more than 8 percent since late January, when prices reached a three-year high of nearly $67 a barrel, as surging U.S. output counters efforts by the Organization of Petroleum Exporting Countries and allied producers to drain a worldwide glut.
West Texas Intermediate for April delivery rose 26 cents to settle at $61.25 a barrel on the New York Mercantile Exchange. Total volume traded was about 13 percent below the 100-day average.
Brent for May settlement added 54 cents to end the session at $64.37 on the London-based ICE Futures Europe Exchange. May futures traded at a $3.28 premium to May WTI.
See also: Spread between Brent and U.S. benchmark quickly tightens
With the Trump administration set to impose tariffs on imported steel as soon as next week, pipeline makers who use foreign metal are bracing for a price increase. Those most at-risk may be energy haulers mapping out expansions in places like the Permian Basin, an oil field beneath Texas and New Mexico that’s pumping crude at record levels.
In the U.S., crude production rose to about 10.3 million barrels a day last week, the highest on record, while inventories expanded to the most in about two months.
Other oil-market news:
- Money managers increased bullish ICE Brent crude oil bets by 21,077 net-long positions to 544,372, weekly ICE Futures Europe data on futures and options show.
- Gasoline futures rose 0.3 percent, while diesel fell 0.3 percent.
- Chevron shut in production at the Alba oil field in the North Sea as a “precautionary measure” following a weather-related power outage.
- Total SA bought Marathon Oil Corp.’s assets in Libya for $450 million, a rare upstream expansion in the war-torn North African nation by a major international company.
- Libyan oil is gushing again with production and exports surging to the highest in years.
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