Oil set for longest run of weekly gains since 2017

Futures in New York rose as much as 0.9 per cent Friday, leading to a 4 per cent rally for the week. Opec’s production dropped for a fourth straight month in March while Venezuela’s oil output has plunged by half amid power failures, according to people familiar with the matter. As for the discussions between the US and China, China’s Vice Premier Liu He said the two sides “reached new consensus on such important issues as the text” of a trade agreement, Xinhua News Agency reported.

Brent for June settlement added 24 cents to $69.64 a barrel on the London-based ICE Futures Europe exchange, after briefly topping $70 for the first time since November in the previous session. The global benchmark crude was at a premium of $7.04 to WTI for the same month.

West Texas Intermediate crude for May delivery advanced 42 cents to $62.52 a barrel at 9:46am on the New York Mercantile Exchange. Prices have rallied for a fifth straight week.

Crude rose along with US equities after a report showed domestic hiring rebounded more than forecast in March.

The market is focused on “Opec confirmation that they will continue to be disciplined. We are looking at potentially less output from shale, mess in Venezuela and now there is risk in Libya,” said Bart Melek, head commodity strategist at Toronto Dominion Bank. “We’ve seen people get a lot more happy about going long in this environment.”

The US benchmark crude climbed more than 30 per cent during the first three months of the year as the Organisation of Petroleum Exporting Countries and its allies trimmed production as part of an agreement to help balance global oil markets. Escalating tensions in Libya and Venezuela are also providing support for crude.

“The geopolitics around Libya and Venezuela, alongside the possible reflation of risk appetite on positive US-China trade talks may well pull the market out of its morning doldrums,” Harry Tchilinguirian, global oil strategist at BNP Paribas, told the Reuters Global Oil Forum.

Prices have also been lifted this week by signs that the US and China are on track to resolve the ongoing trade dispute that has threatened oil demand. US. President Donald Trump said while any trade deal with China was probably still weeks away, both sides were making progress on an accord that could be “very monumental.”

Somewhat undermining the Opec-led effort to prop up the market is surging US oil production, which rose to a record 12.2 million bpd last week, official data showed.