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U.S. crude move higher, amid 4th straight decline in weekly rig counts

Published 09/25/2015, 02:20 PM
Updated 09/25/2015, 02:35 PM
WTI crude closed above $45 a barrel on Friday, while brent remained above $48

Investing.com -- U.S. crude futures rose moderately on Friday extending minor gains from one session earlier, as oil rigs nationwide fell for a fourth consecutive week.

On the New York Mercantile Exchange, WTI crude for November delivery traded in a broad range between $44.85 and $46.34 a barrel, before closing at $45.72, up 0.81 or 1.80% on the session. In spite of a volatile week of trading, Texas Long Sweet futures rose by less than 1.25% during the five-day span after opening on Monday just below $45 a barrel. U.S. crude futures are still up nearly 20% over the last month after falling to six and a half year lows in late-August near $38.

On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between a low of $47.87 and $49.09 a barrel, before settling at $48.60, up 0.43 or 0.90% on the day. Brent futures have now closed higher in five of the last six sessions. For the week, brent crude gained more than 1.5% in value after opening on Monday around $48 a barrel.

Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $2.88, below Thursday's level of $3.47 at the close of trading.

On Friday afternoon, oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count that U.S. oil rigs fell by four last week to 640 for the week ending September 18. A week earlier, the rig count declined by 8 to 644. Oil rigs nationwide have now declined over each of the last four weeks, a skid that dates back to late-August. The U.S. rig count still remains far below its level last fall when it peaked above 1,600.

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Energy traders continued to digest bullish supply data on Friday, after Genscape, Inc. reported a significant draw in crude inventories at the Cushing Oil Hub in Oklahoma, the main delivery point for NYMEX oil. Earlier this week, Genscape, a leading provider of energy information for global commodity markets, said crude stockpiles at Cushing fell by 625,000 barrels for the week ending on Sept. 22. It followed a draw of 1.9 million barrels in U.S. crude inventories, according to a government report, extending a previous decline of 2.1 million a week earlier.

Crude futures have remained below $70 a barrel since last November when OPEC spooked global energy markets with its decision to keep its production ceiling above 30 million barrels per day. Last week, OPEC forecasted that crude prices will not return back to $80 a barrel until 2020.

Investors also digested hawkish comments from Federal Reserve chair Janet Yellen on Thursday evening, which provided strong signals that the U.S. central bank appears ready to raise short-term interest rates. A rate hike is viewed as bullish for the dollar, as foreign investors pile into the greenback to capitalize on higher yields.

On Friday, the U.S. Dollar Index surged more than 0.4% to 96.88, its highest level since mid-August. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

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