Like metals, oil prices finished lower Friday on the day and the week as rising interest rates and the strong US jobs report, plus the sell off in equities, took their toll.
On top of that traders finally focused on the fundamentals of the market and the fact that US oil production has topped 10 million tonnes faster than expected with the US Energy Information Administration (EIA) reporting that level was reached last November, two years ahead of some forecasts.
On top of that US oil rig use continued to rise last week, according to Baker McKenzie with the number now back to levels last August after a fall in late 2017.
March West Texas Intermediate crude fell 35 cents, or 0.5%, to settle at $US65.45 a barrel New York. The contract rose 1.7% Thursday, the biggest single-session gain since Jan. 24, according to FactSet data, but for the week, prices were about 3% lower.
In London, April Brent crude futures, dropped $US1.07, or 1.5%, to end at $US68.58 a barrel for a weekly loss of just over 3%.
The EIA said US oil production topped 10 million barrels a day in November for the first time in nearly 50 years, according to the EIA which finally forced the market to concentrate on the surge in US output.
On Friday, Baker Hughes reported that the number of active oil rigs in the US rose for a second week in a row, highlighting a rise in drilling activity. It rose by 6 to 765 this week, after rising by 17 in the previous three weeks.
However, the total active U.S. rig count, which includes oil and natural-gas rigs, fell by 1 to 946, according to Baker Hughes.
US March natural gas futures fell by a cent to $US2.846 per million British thermal units on Friday to be down more than 10% over the week.
Energy was the worst performer of the S&P 500’s 10 major sectors on Friday thanks to the fall in prices and the weaker-than-expected quarterly earnings from Chevron which blamed problems at some of its operations due to hurricanes, and Exxon Mobil which continued to lose money on its US operations in the 4th quarter.
