Oil climbs, Brent posts best two weeks since 1998

The two-week volume in Brent was at a record high of about 3 million contracts, Reuters data showed. (Shutterstock)

Oil rallied again on Friday, with benchmark Brent crude having its largest two-week gain in 17 years, as falling oil rig counts and violence in producer Libya helped further stall a selloff that began in June.

Crude prices have risen nearly 20 percent over the past six sessions, but remain about 50 percent below their peak from the middle of last year due to worries of a global oil glut.

Brent futures posted a 9 percent gain on the week, their biggest since 2011, and 19 percent over two weeks, the largest since 1998.

Still, the price rebound has been accompanied by sharp market volatility.

U.S. crude oil futures have seen daily price swings of up to 9 percent since last week as bulls and bears squared off positions on mixed signals about crude supplies. Many analysts think the market will remain oversupplied through the first half while falling rig counts and reduced exploration budgets at oil firms suggest to some that the glut may be overcome faster.

The worldwide count for oil drilling rigs fell by 261 in January, oil services firm Baker Hughes said. The average number of U.S. oil rigs fell by 199 in January. This week, another 83 U.S. oil rigs went offline, Baker Hughes said.

"People have only started paying attention to the oil rig count in the past week despite the fact they have been falling for weeks," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. "I think the people really benefiting from these market gyrations are the high frequency traders as volumes are really up."

The two-week volume in Brent was at a record high of about 3 million contracts, Reuters data showed.

Brent settled up $1.23, or 2.2 percent, on the day at $57.80 a barrel. U.S. crude closed up $1.21, or 2.4 percent, at $51.69.

Aside from the rig count data, the market was bolstered by fighting across Libya.

Stronger-than-expected U.S. jobs growth in January helped as well, though the data also raised expectations that a U.S. rate hike may happen as soon as mid-year.

"There are as many positive factors now in the market as negative, and everyone's waiting for the next shoe to drop," said Phil Flynn, analyst at Price Futures Group in Chicago.

Last Update: Wednesday, 20 May 2020 KSA 09:45 - GMT 06:45