Brent Oil Ends Week Flat
Brent oil prices fell on Friday but were little changed on the week as traders caught their breath from a months-long rout, even as signs of rising global supply and a U.S. contango structure threatened deeper losses.
U.S. crude oil futures, meanwhile, continued to slide. Contracts for December delivery settled down $1.08 at $81.01 per barrel, dropping $1.74 since last Friday.
Increased domestic crude stores have depressed the price of short-term futures contracts. The spread between December and January contracts narrowed to 24 cents, threatening to flip to a second-month discount, or contango, for the first time since early this year. The spread <CL-1=R> was at more than 80 cents a few days ago.
Global prices seesawed several times on Friday, initially battered by news that Iraq increased its oil supply in October, while Libya's output remains high, despite instability in both countries.
Oil traders said prices were reversing excessive gains made on Thursday, when the market spiked on news that Saudi Arabia had boosted production but cut supplies to the market in September, instead pumping barrels into storage.
"There's just no shortage of oil anywhere in the world," said Sal Umek of the Energy Management Institute in New York. "Demand is not really robust, and you're going to get the intermittent spell of short-covering."
Brent crude for December delivery settled at $86.13 per barrel, down 70 cents for the day and 3 cents below last Friday's settlement price, off an intraday low of $85.29 a barrel.
Saudi Arabia, the world's top exporter, previously sent signals it is comfortable with markedly lower oil prices and willing to maintain high supply levels to compete for market share.
"Saudi Arabia ... doesn't mind oil going a little bit lower," said Tariq Zahir, an analyst at Tyche Capital Advisers. "With all the production increase in the United States, we are their biggest competitor right now. But they have enough cash to deal with prices going lower."
The U.S. dollar has rallied against other currencies on a improving economic outlook, rising nearly 8 percent in the third quarter and peaked earlier this month at a four-year high, offsetting some losses in the dollar-denominated crude prices for oil exporters.
On Friday, the dollar and equity markets fell on news that an American doctor in New York city had contracted the Ebola virus while working in West Africa.
The Organization of the Petroleum Exporting Countries will meet on Nov. 27 to review its output target for the first half of 2015. So far, only a few members have called for a cut.
Money managers raised their net long U.S. crude futures and options positions in the week to Oct. 21, the U.S. Commodities Futures Trading Commission said in a data release on Friday after crude futures settled. (Additional reporting by Jane Xie in Singapore and Sam Wilkin in London; Editing by Marguerita Choy and Lisa Shumaker)
