Oil steady after volatile week

07/02/2016 07:53 AST

Oil steadied on Friday in a volatile session, as bearish fundamentals pressured prices despite bullish indications earlier in the week.

International benchmark Brent crude futures were 2 cents higher at $34.48 per barrel at 1135 GMT, trading in a range of around $34-$35 a barrel so far this session.

US West Texas Intermediate (WTI) crude futures were up 11 cents at $31.83 a barrel. “Volatility on the oil market is extremely high just now. This is due for the most part to the high speculative activity on the part of market participants,” Commerzbank said in a note. Crude futures benefited earlier this week from the sudden liquidation of a $600 million leveraged fund bet on falling prices.

“The massive increase in speculative (net) long positions in Brent rather than in WTI could be quickly corrected and cause a considerable setback on the market,” Commerzbank warned. An effort by Venezuela to rally support for concerted action to boost prices also buoyed futures.

Venezuelan Oil Minister Eulogio Del Pino is due to meet Saudi Petroleum and Mineral Resources Minister Ali Al-Naimi in Riyadh on Sunday, after meeting the Qatari and Omani ministers this week. A weaker dollar also lent limited support to prices, as the US currency heads for its heaviest weekly loss since 2009.

Oil has been extremely volatile since the start of the year, and in particular this week, as a string of bullish indicators such as a slump in the dollar and potential talks on output cuts clashed with bearish reports of record US crude inventories.

Arab News