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Brent futures <LCOc1> settled at $51.96 a barrel, down $1.03, or
2 percent at the market's close. U.S. crude futures <CLc1> ended
at $49.62 a barrel, down 2.2 percent, or $1.09.
Volumes were heavy, with more than 665,000 WTI futures changing
hands, surpassing the daily average of 525,000 contracts.
For the week, Brent fell 7 percent, while U.S. crude lost 6.7
percent. It was the largest percentage drop for both benchmarks
since the week of March 10, when rising concern about the supply
glut undermined big bets on an oil rally.
Those speculative bets have been on the rise again. On Friday,
the U.S. Commodities Future Trading Commission (CFTC) showed
total long positions in U.S. crude rose in the week to April 18
to their highest in more than a month at 355,077 contracts. But
oil has sagged in recent days, much as it did in March.
Many in the market still expect the Organization of the
Petroleum Exporting Countries (OPEC) to renew its production
cuts for another six months. On Friday an OPEC and non-OPEC
member technical committee recommended extending cuts of almost
1.8 million barrels per day (bpd) at the upcoming May 25
meeting.
Still, shipment data shows more oil transiting world oceans than
when cuts were put in place.
“The reason that we’re seeing the selloff today and really for
this week has been related to the fact that we’re seeing higher
waterborne imports arriving from the Middle East,” said Matt
Smith, director of commodity research at Clipperdata.
“We should continue to remain well supplied at least over the
next few weeks."
In addition, Russia's Energy Minister Alexander Novak declined
to say whether Russia would adhere to an extension, saying
global stocks were declining.
Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB,
does not expect OPEC to roll over its cuts, saying it could
potentially leave the cartel vulnerable to "more stimulus of the
U.S. shale oil sector."
U.S. production, already at its highest since August 2015, looks
likely to keep rising. U.S. drillers added rigs for a 14th
consecutive week, Baker Hughes said on Friday.
(Additional reporting by Ron Bousso in London, Henning Gloystein
in Singapore; Editing by David Gregorio and Chizu Nomiyama)
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