Crude ticks up, as U.S. oil rigs surge to highest level since late-April

Investing.com -- Crude futures inched up on Friday in relatively quiet pre-holiday trade, as the U.S. oil rig count rose sharply last week, hitting its highest level since late-April.

On the New York Mercantile Exchange, WTI crude for August delivery traded between $47.91 and $49.08 a barrel before closing at $49.02, up 0.69 or 1.43% on the session. On the Intercontinental Exchange (ICE), brent crude for September delivery wavered between $49.26 and $50.42 a barrel, before settling at $50.39, up 0.68 or 1.37% on the day. Crude futures accelerated gains in the final hour to close near session highs.

Both the international and U.S. benchmarks of crude have moved slightly higher over the last week since U.K. voters shocked markets worldwide by approving a measure that paves the way for Britain's departure from the European Union. On Thursday, crude ended the second quarter up by nearly 25% -- its strongest three-month period in seven years.

In U.S. afternoon trading, oil services firm Baker Hughes said that U.S. oil rigs increased by 11 to 341 for the week ending on June 24, reaching their highest level since April 22. With the sharp gains, domestic oil rigs in the U.S. moved higher for the fourth time in five weeks. At the same time, natural gas rigs inched up by one to 90, helping push the overall count up to 431.

The continued gains in the nationwide rig count provide leading indications that U.S. producers are ready to return online as prices stabilize near $50 a barrel. Despite the recent upswing in prices, crude futures are still down sharply from their level in November, 2014, when OPEC rattled global markets with a strategic decision to maintain its production ceiling above 30 million barrels per day. The tactic triggered a prolonged battle between the U.S. and OPEC for market share, depressing prices amid a glut of oversupply.

Elsewhere, investors continued to closely monitor labor negotiations in Norway where top oil companies and labor unions engaged in heated talks to avoid a work stoppage. If the sides are unable to reach a deal by Saturday's deadline workers at five Norwegian oil fields could strike immediately, resulting in an estimated 6% decline in production, according to the Norwegian Oil and Gas Association.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.25% to an intraday low of 95.23, before rallying slightly to 95.48 in U.S. afternoon trading. The index dropped by nearly 3% over the first half.

Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App