Home / Oil steady, but down for the week as glut worries face OPEC cuts
Friday, 17 February 2017
Oil steady, but down for the week as glut worries face OPEC cuts
Brent down 2 pct on the week, WTI 1 pct lower
* U.S. drilling rig count rises for fifth straight week
* U.S. gasoline margins hit 1-year low on oversupply fears
* Dollar index hits session high as U.S. Treasury yield pare fall (Adds settlement prices, weekly declines)
Oil prices ended largely steady on Friday but lower on the week, with U.S. crude notching its first weekly decline in five weeks, as rising U.S. drilling and record stockpiles faced efforts by major producers to cut output to reduce a global glut.
U.S. energy companies added oil rigs for a fifth straight week, Baker Hughes said, extending a nine-month recovery as drillers take advantage of crude prices that have held mostly over $50 a barrel since OPEC agreed to cut supplies in late November.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed to cut output almost 1.8 million barrels per day (bpd) during the first half of 2017.
"At some point, it's going to be difficult for that agreement to stay in place when member countries can drill more and make more money."
Oil prices, however, were holding within an average band of about $1.30 per barrel so far this year, one of the most range-bound periods since the price slump began in mid-2014.
The oil market was also pressured by a second week of gains in the dollar index .DXY , which rose on Friday following mildly hawkish view from Federal Reserve Chair Janet Yellen and surprising strong U.S. data on retail sales and consumer prices. USD/ A stronger U.S. dollar makes it more expensive for holders of other currencies to buy the greenback-denominated commodity.