Oil steadies after hitting $70 amid tighter supplies
hong kong — Oil steadied in London after briefly climbing above $70 a barrel for the first time in three years as a global surplus recedes.
Brent futures were little changed, having added 2.3 per cent this week in a fourth weekly increase. The longest sequence of declines in US crude stockpiles during winter in a decade — a result of rising demand and Opec’s output cuts — was a key driver of the rally.
Oil has continued to surge this year after posting a second annual advance as the Organisation of Petroleum Exporting Countries and its allies keep a tight rein on supply. While the global market is balancing, there are still more than 100 million barrels of surplus inventories that need to be cleared, according to UAE Energy Minister Suhail bin Mohammed Faraj Faris Al Mazrouei.
“The market is as bullish as it gets at this point, with little further upside left for now,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. Brent for March settlement lost 10 cents to $69.16 a barrel on the Londonbased ICE Futures Europe exchange at 10.03am, after rising six cents on Thursday. The global benchmark traded at a premium of $5.77 to March WTI.
West Texas Intermediate for February delivery was at $63.45 a barrel on the New York Mercantile Exchange, down 35 cents. Total volume traded was about 26 per cent above the 100-day average. Prices are up 3.3 per cent this week. WTI gained 23 cents to $63.80 on Thursday, the highest close since December 2014.