21/11/2015 11:08 AST

Brent oil settled 1 per cent higher on Friday on pre-weekend short-covering, while US crude settled lower but just above the $40-per-barrel support it has struggled to defend after a surge in inventories.

US crude's expiring spot contract also reached its widest discount, or contango, in more than four years to its nearby contract, reflecting worries about the large immediate supplies of oil available in the market

Both Brent and US crude saw muted trading early in the session as a stronger dollar weighed on oil and other commodities.

With an hour to settlement, the two benchmarks rallied before US crude tumbled in dramatic fashion, falling nearly 4 per cent to below $39, before recovering to settle slightly lower on the day.

Brent futures ended up 48 cents at $44.66 a barrel. It rose to as high as $45.50 during its late rally.

US crude's West Texas Intermediate (WTI) December futures expired on Friday down 15 cents at $40.39 after hitting a low of $38.99, the cheapest since Aug. 27. January WTI settled 18 cents higher at $41.90.

"WTI couldn't convincingly push below $40 despite a few attempts today and that's what probably what led to the late support before contract expiry," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

"We've also hit technical oversold levels on both Brent and WTI, making the pre-weekend short-covering logical."

For the week, Brent was up 2 per cent while WTI fell almost 1 per cent.

Before its expiry as the spot contract, WTI's December reached a discount as wide as $2.90 a barrel versus the nearby January. Reuters data showed that was the deepest contango since 2011 for a prompt WTI contract versus the second month.

WTI's contango blew out in recent weeks, coinciding with the spike in the number of barrels of US crude being stored, as traders saw more benefit of buying into oil meant for later shipment due to weak spot prices. Government data on Wednesday showed an eighth straight week of builds in US crude inventories.

WTI has also weakened against Brent in four straight sessions.


Reuters

Ticker Price Volume
SSP 71.40 192,740
SPACE42 2.24 12,294,840
QSHS 0.00 0
QRES 0.00 0
ABK 289.00 1,332,091
BMMI 0.45 17,100
ABOB 0.15 0
(In US Dollar) Change Change(%)
Brent 75.17 0.94 1.27
WTI 71.24 1.14 1.63
OPEC Basket 73.32 0.27 0.37
Opec output falls to lowest in a year as Venezuela's woes deepen

05/04/2018

Opec crude production dropped to the lowest in a year amid the woes in Venezuela's oil industry. Output from the 14 members of Organisation of Petroleum Exporting Countries fell by 170,000 barrels to

Gulf News

Oil extends rally after US rigs decline as Iran risks persist

03/04/2018

Oil's rally above $65 a barrel is being propelled by a sign that American explorers have curtailed drilling activity as well as ongoing speculation that the US could reimpose sanctions on Opec produc

Gulf News

Opec seeks sustainable cooperation with other exporters

29/03/2018

The Organization of the Petroleum Exporting Countries (Opec) is seeking "very long-term" cooperation with other crude exporters, the secretary general of the oil exporting group said on Wednesday.

The Gulf Today

OPEC, Russia working on longer oil alliance

28/03/2018

Saudi Arabia and Russia are working on a long-term oil pact that could extend controls over world crude supplies by major exporters for up to 20 years, the Kingdom's crown prince has said.

Arab News

Oil prices likely to rise into high 60s

27/03/2018

International oil prices are likely to tick up into the "high-sixties" further into 2018, according to Dr Mohammed bin Hamad al Rumhy, (pictured) Minister of Oil and Gas. Speaking at the opening of t

Oman Daily Observer