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Crude oil futures - weekly outlook: May 30 - June 3

Published 2016-05-29, 04:50 a/m
© Reuters.  Oil futures fall, but score third straight weekly gain
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Investing.com - Oil futures ended lower on Friday, but still posted a third consecutive week of gains amid mounting concerns over global supply disruptions.

Both Brent and West Texas Intermediate oil futures cracked $50 this past week for the first time since October as traders eyed supply disruptions in Nigeria, France, Canada and Venezuela.

On the ICE Futures Exchange in London, Brent oil for August delivery shed 22 cents, or 0.44%, to end the week at $49.95 a barrel. Despite Friday’s modest decline, London-traded Brent futures rose $1.23, or 2.46%, on the week.

On Thursday, Brent prices jumped to $50.96, a level not seen since October 12, as unplanned supply disruptions in Africa and North America eased concerns over a global glut.

Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in July dipped 15 cents, or 0.3%, to settle at $49.33 a barrel. For the week, however, New York-traded oil futures picked up 92 cents, or 1.86%.

Nymex prices rallied to $50.21 on Thursday, the most since October 9. U.S. crude futures are up nearly 80% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment.

Oilfield services provider Baker Hughes said late Friday the number of rigs drilling for oil in the U.S. fell by two to 316 in the latest reporting week, keeping up a broad trend of declines.

Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at 62 cents at Friday’s settlement, compared to a gap of 69 cents by close of trade on Thursday.

In the week ahead, oil traders will be focusing on U.S. stockpile data on Wednesday and Thursday for fresh supply-and-demand signals. The reports come out one day later than usual due to the Memorial Day holiday in the U.S. on Monday.

Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.

Meanwhile, investors will be looking ahead to the Organization of Petroleum Exporting Countries meeting in Vienna on Thursday. Most market analysts expect the oil cartel to keep their production quota unchanged amid rising prices.

The oil cartel’s most recent meeting in Qatar in April ended without agreement to freeze output at current levels due to Saudi Arabia's insistence that Iran be part of the agreement.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 30

U.S. markets will be closed for the Memorial Day holiday.

Wednesday, June 1

The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Thursday, June 2

The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.

The Organization of Petroleum Exporting Countries will meet in Vienna on Thursday to review their output strategy.

Friday, June 3

Baker Hughes will release weekly data on the U.S. oil rig count.

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