Despite Friday’s decline in Brent, both the North Sea crude and WTI benchmarks gained about 9% in the week, the biggest weekly percentage gain in the last six weeks.
US energy firms cut oil rigs for a sixth week in a row this week, the longest streak of weekly declines since June, data released on Friday showed, a sign low prices continued to keep drillers away from the well pad.
Drillers removed nine oil rigs in the week ended 9 October, bringing the total rig count down to 605, oil services company Baker Hughes said in its closely followed report. However, some oil analysts believe that fall might not be enough to rein in the oil bears.
Jim Ritterbusch, president of Galena, Illinois-based Ritterbusch & Associates, said earlier in the day that he would be looking for a decrease of more than 10-15 rigs in Friday’s report in order to keep the short term bull move alive in the oil markets.
Some traders said concerns about falling shale output in Canada, as well as the Bakken region, added support to US crude.
“I think the market is repricing (US crude) higher versus other grades of crude in the Atlantic basin because of this fear,” said Scott Shelton, oil broker and commodities specialist at ICAP in Durham, North Carolina.
“Whether its ‘fear’ or ‘reality’ remains to be seen.”
The momentum had been more bullish earlier in the session after the US central bank’s meeting minutes on Thursday showed more policymakers than expected had agreed to keep the first interest rate hike in a decade on hold.
In the Middle East, an Iranian Revolutionary Guards general was killed near Aleppo, where he was advising the Syrian army.