Oil up, marking third week of gains as market sentiment improves

Fri Apr 22, 2016 3:04pm EDT
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By Devika Krishna Kumar

NEW YORK (Reuters) - Oil prices rose on Friday and notched their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing.

Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector, traders said.

"The current rally is driven by a market sentiment that is becoming more and more convinced that the worst is over and the global oil market rebalancing process is already in play," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Brent futures ended the session up 1.3 percent at $45.11 per barrel, while U.S. West Texas Intermediate crude settled up 1.3 percent at $43.73 a barrel. Both contracts jumped as much as 3 percent during the session.

The rally was limited by profit taking ahead of the weekend, brokers said.

Brent has surged 4.5 percent this week and U.S. crude 8.4 percent as both benchmarks notched a third week of gains. Crude is up more than two-thirds since its 2016 lows between January and February.

Traders also pointed to strong crude imports to China in March as supporting prices.

Still, some analysts warned that the oil market was still far from balancing supply and demand.   Continued...

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. REUTERS/Lucy Nicholson