“The weaker USA dollar provided some interim support to the commodity complex, but volatility in crude oil remains extreme”.
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The US Energy Information Administration (EIA) reported on Wednesday that crude inventories rose by 7.8 million barrels for the week ended January 29.
According to the EIA, these factors, plus the potential for additional crude oil supply to enter the market have played a part in pushing USA crude prices to below $30 per barrel.
Russian Foreign Minister Sergei Lavrov said if there is consensus among the OPEC and non-OPEC members to meet, then they will meet.
“Many people are hoping that oil prices go higher, especially producing countries whose budgets are under stress”, said Andrew Lipow of Lipow Oil Associates.
As of 12:37GMT front month Brent crude futures were higher by 1.8% to $33.34 per barrel on the ICE, alongside gains of 1.87% to $30.45 per barrel on the NYMEX.
Oil fell 2 per cent in volatile trading on Thursday, as support from a weakening dollar was overshadowed by scepticism that cash-strapped OPEC member Venezuela’s effort to lobby crude producers for joint output cuts would succeed.
“Chances of a coordinated production cut are extremely low and this is nothing new”, Michael Wittner, oil analyst at Société Générale, said in a report.
That was almost double market expectations and took total crude inventories to 502.7 million, topping 500 million barrels for the first time on record, exacerbating market concerns over the global glut that has depressed prices for nearly two years.
Investment bank Jefferies said on Friday that US crude prices had traded within a 19 percent band over the last week and with inter-day moves approaching 11 percent. But so far, none of OPEC’s Gulf members, including top exporter Saudi Arabia, has publicly backed calls for an emergency meeting. US West Texas Intermediate (WTI) crude futures were up 8c at $31.80 a barrel.
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Several major oil producers indicated production cuts, but the demand is slowing after troubles in China and continued volatility in the emerging markets. “We see the low price regime persisting until 2Q17”, Morgan Stanley said.
