Oil prices rose Friday, helped by rising Chinese crude demand and threats of a strike in Africa’s largest oil exporter, but U.S. crude still posted its biggest weekly loss in two months, Reuters reported.
But prices were still on track for their second consecutive weekly loss amid concerns rising U.S. production would undermine OPEC-led supply cuts aimed at curbing the glut.
U.S. West Texas Intermediate crude futures ended Friday’s session 67 cents, or 1.2%, higher, at $57.36 a barrel. The contract fell 1.7% on the week, Kallanish Energy learns.
Brent crude was up $1.25, or 2%, at $63.45/Bbl by 2:26 p.m. ET (1926 GMT), but still heading for a weekly drop.
China’s crude oil imports rose to 9.01 million barrels per day (MMBPD), the second highest on record, data from the General Administration of Customs showed Friday, Reuters reported.
“We have good numbers out of China,” John Macaluso, an analyst at Tyche Capital Advisors, told Reuters. “A lot of the extra imports are not from Saudi Arabia. Iran, Russia and the U.S. are some of the countries picking up the slack.”
Booming demand will push China ahead of the U.S. as the world’s biggest crude importer this year. U.S. investment bank Jefferies forecast 2018 global oil demand growth of 1.5 MMBPD, driven by almost 10% demand growth in China.
Tamas Varga, analyst with PVM Oil Associates, told Reuters threats of a strike later this month from a union in Nigeria, Africa’s largest oil exporter, was supportive of prices, as was reduced flow along the Britain’s Forties oil pipeline, one of the grades that sets Brent prices.
But U.S. oil production growth has threatened to undermine production cuts by the Organization of the Petroleum Exporting Countries, Russia and other producers. The group has agreed to extend the pact to the end of 2018.
The voluntary output cuts pushed oil prices higher between June and October, with Brent gaining roughly 40%.
Data last week showed U.S. crude output had risen 25,000 BPD, to 9.7 MMBPD in the week ended Dec. 1 — the highest production since the 1970s and close to the production levels of Russia and Saudi Arabia.