Crude poses fourth weekly decline over supply concerns

Oil prices on Friday bounced up off the year’s lows as some producers reduced exports and US rig additions slowed, but the rebound was modest and crude posed its fourth weekly decline on persistent concerns about global oversupply.

Brent crude futures rose 45 cents, settling at $ 47.37 per barrel, and US West Texas Intermediate crude settled at $ 44.74 per barrel, up 28 cents. Both benchmarks notched a weekly loss exceeding 1.6 percent.

On Thursday, oil prices hit a sixmonth low. They are down more than 12 percent from late May when producers led by the Organization of the Petroleum Exporting Countries ( OPEC) extended a pledge to cut output by 1.8 million barrels per day ( bpd) through March 2018.

“You’re starting to get to the lower end of the range,” said Rob Haworth, senior investment strategist at US Bank Wealth Management.

“You’re starting to see some capitulation by investors because the data isn’t going as they hoped,” Haworth said.

Kazakhstan, which agreed to cut supplies last year as part of the nonOPEC bloc, said it would reduce production in June and July after overproducing for three months in a row.

But OPEC members Nigeria and Libya, which are exempt from the deal, have increased exports as they bounce back from supply disruptions caused by protests, rebel activity and mismanagement.

In the latest sign of a crude glut, aging supertankers are being used to store unsold oil from Singapore and Malaysia.

Raising US crude output has undermined OPEC- led cuts, with pro- duction up more than 10 percent in the past year. US Energy Information Administration data this week showed growing gasoline stocks and shaky demand.

US energy companies added oil rigs for a record 22nd week in a row, energy services company, Baker Hughes, said on Friday. Still, the pace of additions has slowed in recent months, and lower prices could test shale’s resiliency.

“I think there’s evidence that we’re starting to see reactions by shale producers,” said Haworth. “New investments are slowing down,” he continued.