Oil ends steady near $50; best monthly gain in Brent in seven years

Fri Apr 29, 2016 3:41pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices ended steady on Friday after hitting 2016 highs but finished April trading about 20 percent higher, with Brent crude having its best monthly gain in seven years.

A weaker dollar and optimism that a global oil glut will ease have lifted crude futures by more than $20 a barrel since they plumbed 12-year lows below $30 in the first quarter.

Brent futures settled just a penny lower at $48.13 a barrel, after reaching a 2016 peak at $48.50. It rose 21.5 percent in April, its largest monthly advance since May 2009.

U.S. crude futures closed 11 cents lower at $45.92 a barrel, after hitting a year-to-date high at $46.78. It gained 20 percent in April, the biggest monthly gain in a year.

With prices less than $5 away from $50 a barrel, investment bank Jefferies said the market "is coming into better balance" and would flip into undersupply in the second half of the year.

But others warned that the rally was driven by investors holding large speculative positions, while oil stockpiles were still high, with a Reuters survey showing OPEC output in April rising to its most in recent history.

"The issue is that we haven't seen price rallies ... correlate with fundamentals," said Hamza Khan, senior commodity strategist at ING. "The fundamentals - high stocks, high production - haven't changed."

Technical analysts said crude could cruise to $50 a barrel but stiffer resistance before $55 could spark profit-taking on the market's biggest rebound in two years.   Continued...

 
A pump jack is seen near sunflowers in Guthrie, Oklahoma in a September 15, 2015 file photo. REUTERS/Nick Oxford/Files