Oil prices extend gains, move further away from five-month lows
Oil prices rose around 1% on Friday to move further away from five-month lows hit earlier in the week, buoyed by a report that Washington could postpone trade tariffs on Mexico and signs OPEC and other producers may extend crude supply cuts.
Brent crude futures were up 50 cents, or 0.8%, at $62.17 a barrel by 0041, having risen earlier to $62.41. They gained 1.7% on Thursday.
U.S. West Texas Intermediate crude futures were up 50 cents, or 1%, at $53.09 per barrel, after trading as high as $53.33. They finished the previous session 1.8% higher.
On Wednesday, Brent and WTI sank to their lowest levels since mid-January at $59.45 and $50.60 respectively, after U.S. crude production hit a new record-high and stockpiles climbed to their highest since July 2017.
By then, both contracts were in bear-market territory, having lost more than 20% from peaks reached in late April.
But on Thursday oil prices followed U.S. stocks higher after Bloomberg News reported the United States is considering a delay in the tariffs on Mexico as talks continue.
“After prices hit the depth of the sewer this week, and (are) arguably in oversold territory, traders were always going to be predisposed to book profits ahead of the weekend,” Stephen Innes, managing partner at Vanguard Markets said in a morning note.
Nevertheless, sentiment on prices remains dim as fresh signs emerge of a stalling global economy and ongoing concerns about growing U.S. crude supply.
Prices had been supported by supply curbs by the Organization of the Petroleum Exporting Countries (OPEC) and some allies including Russia. Supply has also been limited by U.S. sanctions on oil exports from Iran and Venezuela.
President Vladimir Putin said on Thursday that Russia had differences with OPEC over what constituted a fair price for oil, but that Moscow would take a joint decision on output at a policy meeting in coming weeks.