Brent up 1 percent on short-covering; U.S. crude down, just above $40

Fri Nov 20, 2015 3:56pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Barani Krishnan

NEW YORK (Reuters) - Brent oil settled 1 percent higher on Friday on pre-weekend short-covering, while U.S. crude settled lower but just above the $40-per-barrel support it has struggled to defend after a surge in inventories.

U.S. crude's expiring spot contract also reached its widest discount, or contango, in more than four years to its nearby contract, reflecting worries about the large immediate supplies of oil available in the market

Both Brent and U.S. crude saw muted trading early in the session as a stronger dollar weighed on oil and other commodities.

With an hour to settlement, the two benchmarks rallied before U.S. crude tumbled in dramatic fashion, falling nearly 4 percent to below $39, before recovering to settle slightly lower on the day.

Brent futures ended up 48 cents at $44.66 a barrel. It rose to as high as $45.50 during its late rally.

U.S. crude's West Texas Intermediate (WTI) December futures expired on Friday down 15 cents at $40.39 after hitting a low of $38.99, the cheapest since Aug. 27. January WTI settled 18 cents higher at $41.90.

"WTI couldn't convincingly push below $40 despite a few attempts today and that's what probably what led to the late support before contract expiry," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

"We've also hit technical oversold levels on both Brent and WTI, making the pre-weekend short-covering logical."   Continued...

 
A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011.  REUTERS/Jo Yong-Hak