SINGAPORE: Crude futures rose around 1 percent on Friday after American inventories fell for a fourth straight week although prices are set for a weekly drop on a stronger dollar.
Oil saw steep falls earlier this week as a resurgent dollar weighed on the market amid concerns U.S. crude supplies may have started rising again after three weeks of draws.
July Brent crude climbed 47 cents to $63.05 a barrel by 0506 GMT but was set drop for a second straight week.
Front-month U.S. crude was at $58.23 a barrel, up 55 cents, although on track to end a record weekly winning streak.
Wildfires in Canada, which knocked out 10 percent of its oil sands output, also supported prices.
Data from the U.S. Energy Information Administration (EIA) showed on Thursday that crude oil inventories fell by 2.8 million barrels last week, down for the fourth week ahead of Monday’s Memorial Day holiday, which unofficially kicked off the peak summer driving season in the United States.
The fall in crude stocks in EIA’s data was more than the 857,000 barrels drawdown forecast in a Reuters survey and contrary to the build of 1.3 million barrels estimated by the American Petroleum Institute. [API/S]
“The global supply imbalance is set to persist into the second half of 2015, but pressure to store in the U.S. is likely to taper off over the summer, temporarily flattening the WTI curve,” Barclays analysts said in a note.
Brent’s premium over U.S. prices has come off over 40 percent since mid-April as OPEC maintained production, keeping markets well-supplied.
The group is expected to keep its production quota unchanged when it meets in Vienna on June 5.
“With OPEC’s June 5 meeting right around the corner and no chance of a policy change, we will continue to focus on U.S. production and production costs,” Societe Generale analysts said in a note.