Crude prices slipped to the lowest in nearly a year last week as concern grew about the persistence of a three-year old surplus of oil inventories.
ABN Amro senior energy economist Hans van Cleef was quoted by the news agency as saying: "After the steep drop in oil prices of recent weeks, I believe that especially hedge funds saw nice buying momentum and lower United States crude production was the trigger to act".
Oil futures on June 30 were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in USA output.
The current U.S. crude futures were up by a massive 5.1% increase this week alone, while the Brent crude also did well on this week having 4.8% increase on its belt. It has been a bullish week for the oil market", and "There are two key drivers.
A weaker USA dollar DXY, +0.18% which has contributed to a positive sentiment across most commodities, also helped oil prices this week, said Bjarne Schieldrop, chief commodities analyst at SEB Markets.
The bank cut its average 2017 and 2018 West Texas Intermediate (WTI) crude oil price outlook to $47 per barrel and $50 per barrel, from $52 and $53 respectively.
American production declined 100,000 barrels a day last week and the US Energy Information Administration said crude stocks increased by 118,000 barrels.
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Omran al-Zwai, a spokesman for Arabian Gulf Oil Company (AGOCO), an NOC subsidiary, said output had been as high as 950,000 bpd in recent days, rising from about 885,000 bpd at the start of last week.
The price for Brent crude oil was up 0.78 percent at 9:15 EDT to $48 per barrel.
A forecast released this month by the Canadian Association of Petroleum Producers sees the country's output increasing by 270,000 barrels a day in 2017 and another 320,000 b/d next year. The bank is now expecting a price of around US$47.50 a barrel in the coming three months, down from a more optimistic US$55 a barrel.
Despite cuts of 1.8 million bpd since January by the OPEC and its allies, the glut continues to persist. For example, the combined production from Libya and Nigeria, the two OPEC members not subject to the agreed cuts, rose... from last November.
WTI prices have shed about 10.6% for the quarter and were ready to tally a decline of 15.8% for the first half of the year, according to FactSet data, based on the most-active contracts.
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