Reuters :
Global oil prices surged as much as 12 percent on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut, while a bounce in stock markets fed appetite for risk.
Despite the strong daily gain, oil prices were poised to end the week down as much as 5 percent.
The United Arab Emirates’ energy minister said the Organization of the Petroleum Exporting Countries (OPEC) was willing to cooperate on an output cut, the Wall Street Journal reported on Thursday after crude futures settled in US trade.
Many traders were sceptical at first about the report, noting that Venezuela and Russia had tried in vain earlier in the week to stir Saudi Arabia and other major producers into agreeing to output cuts.
But after a 75 percent price slump since mid-2014 that has taken crude prices to more than 12-year lows, many were inclined to believe that a rebound was due sooner or later if production tightens or demand picks up.
“We expect declining US oil production, in particular, to drive the oil price back up to $50 per barrel by the end of the year,” Frankfurt-based Commerzbank said in a note.
US crude contracts over the next five years were trading under $50 a barrel on Friday, rising above that level only from November 2021 onwards.
US crude’s front-month CLc1 settled up $3.23, or 12.3 percent, at $29.44 per barrel, reaching a session high of $29.66. It hit a 12-year low of $26.05 the previous day. For the week, it lost 4.7 percent.
Brent’s front-month LCOc1 closed up $3.30 at $33.36 a barrel, having slid below $30 on Thursday. Weekly losses were pared to 2 percent.
Prices extended gains after data showed an eighth straight weekly drop in the number of US rigs drilling for oil. Oil also got a boost from the rally in global equity markets.
