LONDON/TOKYO (Reuters) – Oil prices stood near a one-week high on Friday as global equities headed for their biggest weekly gain in six years as the dollar slipped to a three-year low.
U.S. West Texas Intermediate crude for March delivery was down 20 cents at $61.15 a barrel by 1410 GMT, having touched a one-week high of $61.89. The activity was subdued, with many Asian markets closed for the Lunar New Year holiday.
The U.S. crude contract has risen by about 3 percent on the week after losing nearly 10 percent last week.
London Brent crude was up 5 cents at $64.38. Brent is up nearly 3 percent for the week after a decline of more than 8 percent last week.
“Oil is getting support from a rebound in global stock markets and a weak dollar, but the upside is limited due to a projection for rising U.S. production,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
The dollar slipped to a three-year low against a basket of currencies on Friday but later regained some ground <.DXY> to trade 0.5 percent up, limiting gains in the oil market. A weaker dollar often boosts oil and other dollar-denominated commodities. [USD/]
World shares were set to post their best week of gains in six years after two consecutive weeks in the red.
Also supporting oil prices was a statement from the United Arab Emirates energy minister late on Thursday saying oil producers led by Saudi Arabia and Russia aimed to draft an agreement on a long-term alliance by the end of the year.
OPEC and some non-OPEC producers including Russia have been restraining production by 1.8 million barrels per day (bpd) to prop up prices. The arrangement expires at the end of 2018.
However, surging U.S. production is offsetting those efforts. U.S. crude output hit a record 10.27 million bpd last week, the Energy Information Administration said on Wednesday, making it a bigger producer than Saudi Arabia.
“Drilling activity in the U.S. continues to pick up … Adding to this, producers appear to be more efficient than they were mid last year,” ING said in a note, adding that rising U.S. supplies and the liquidation of speculative longs were likely to keep oil prices under pressure.
(Reporting by Dmitry Zhdannikov and Osamu Tsukimori; Editing by Dale Hudson)
Copyright 2018 Thomson Reuters.
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Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.