WTI Crude Oil (USD/bbl) Brent Crude (USD/bbl) Rig Count Number
This Week 51.42 57.2 928
Last Week 49.29 55.62 936
  • Supply glut should shrink soon if cuts continue: IEA’s Birol
  • S. crude inventories fell by 2.75 million barrels last week

Oil climbed to the highest level in two weeks as dwindling U.S. crude stockpiles and near-record Chinese imports signaled the worldwide glut is eroding.

Futures advanced 1.7 percent in New York Friday, posting the the biggest weekly gain in a month. In China, the world’s second-biggest oil market, crude imports in September jumped to the second-highest on record. U.S. oil inventories slid for a third straight week and the chief of the International Energy Agency predicted worldwide supply will soon be in sync with demand, provided OPEC maintains ongoing output cuts.

“There were a lot of concerns about oversupply only a few months ago that seem to not be at the forefront right now,” Michael Loewen, a commodities strategist at Scotiabank in Toronto, said by telephone. “The oil market is obviously trading under tighter fundamentals than it has in the recent past.”

Oil has risen five of the past six weeks on signs that self-imposed supply limits implemented by the Organization of Petroleum Exporting Countries and allied producers such as Russia are gradually draining a surfeit that has weighed on prices for more than three years. OPEC was said to estimate that its efforts to clear the oversupply will be successful by the end of September 2018.

West Texas Intermediate for November delivery added 85 cents to settle at $51.45 a barrel on the New York Mercantile Exchange. Total volume traded was about 6 percent below the 100-day average. Prices are up 4.4 percent this week.

Brent for December settlement climbed 92 cents to end the session at $57.17 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.44 to December WTI.

China’s overseas crude purchases averaged about 9.04 million barrels a day in September, up 13 percent from the previous month, according to Bloomberg calculations using General Administration of Customs data released Friday. Chinese oil demand is on track to rise by 820,000 barrels a day this year, according to Jefferies Group LLC.

Prices also gained amid tensions in Iraq between the central government and the country’s semi-autonomous Kurdish region. At least 6,000 Kurdish fighters have been deployed in the oil-rich Kirkuk province following “threats” of attack from Iraqi forces, media network Rudaw reported. The central government has condemned the Kurds’ late September independence referendum.

Chinese import data “was well in excess of expectations and you’ve got an armed stand-off in Kurdistan,” Eric Nuttall, a portfolio manager with Ninepoint Partners LP in Toronto, said by telephone. “Those two factors are creating a bid for oil.”