Seoul: Crude oil futures rose on Friday in Asian trading, adding to their biggest one-day rally in over six years the day before led by recovering equity markets and news of diminished crude supplies. US crude futures are on track for their first weekly gains in 11 weeks, ending the longest losing streak since 1986. Brent crude is on track for its first weekly gain in two weeks.
Stock markets around the world rallied on Thursday, shaking off a slump related to China growth fears, as strong US economic data boosted investor sentiment, and the dollar advanced for a third consecutive session. Front-month October Brent crude was up 44 cents, or nearly 1 per cent, at $48 per barrel, after trading sideways earlier. It settled $4.42 higher at $47.56 per barrel in the previous session.
US crude was 80 cents, or nearly 2 percent, higher at $43.36 per barrel, after ending up $3.96, or 10.3 percent, at $42.56 per barrel, its biggest one-day percentage gain since March 2009. "A short covering rally, led by crude oil pushed commodities higher across the board. Better than expected US GDP numbers was the main spark, although the force majeure on BP's exports from Nigeria extended the gains," ANZ said in a note on Friday morning.
"The recovery in commodity prices looks fragile with concerns over China's growth still weighing on market activity," the bank added. The US economy grew faster than initially thought in the second quarter on solid domestic demand. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 per cent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate for the April-June period.
Shell's Nigerian unit, Shell Petroleum Development Company (SPDC), declared force majeure on Bonny Light crude oil exports on Thursday after shutting down two key pipelines in the country due to a leak and theft. China's falling auto sales have been at the forefront of concerns that its economy is slowing much faster than expected, weighing on oil prices.
Venezuela has been contacting other members of the Organization of the Petroleum Exporting Countries (OPEC), pushing for an emergency meeting with Russia to come up with a plan to stop the global oil price rout, the Wall Street Journal reported.
