Oil rebounds from recent weakness, still rangebound

Fri Mar 3, 2017 3:40pm EST
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By David Gaffen

NEW YORK (Reuters) - Oil prices surged on Friday, as a weaker dollar encouraged buying but investors remained cautious after Russian production figures showed weak compliance with a global deal to cut output.

Global benchmark Brent LCOc1 settled up 82 cents, or 1.5 percent, to $55.90 a barrel, recovering some of Thursday's losses. WTI futures CLc1 rose 72 cents to $53.33 a barrel, a 1.4 percent gain.

Both benchmarks have traded in a tight range all year. U.S. crude's peak this year was $55.24 on the first trading day of 2017; its low was $50.71 later in January.

Oil added to gains late in the session as the dollar weakened modestly after a speech by U.S. Federal Reserve Chair Janet Yellen. The dollar index .DXY was down 0.7 percent on Friday, slipping in late trading after Yellen's statement, which suggested a rate increase would come at the close of its two-day meeting on March 15. [USD/]

U.S. drillers added rigs for the seventh straight week, Baker Hughes said on Friday. Rig counts rose by seven rigs to bring the total to 609, most since October 2015, the energy services company said. [RIG/U]

"For the large part, an interest-rate hike in the near-term is probably already valued into the dollar," said Sarp Ozkan, DrillingInfo's manager of energy analytics.

Dollar strength tends to pressure oil prices, as global trade in petroleum is conducted in dollars.

Oil's gains were capped by lingering concerns over compliance, by producers outside the Organization of the Petroleum Exporting Countries, with a global deal to rein in oversupply.   Continued...

A worker walks past a pump jack on an oil field owned by Bashneft in Bashkortostan, Russia, January 28, 2015.      REUTERS/Sergei Karpukhin/File Photo