Oil headed for the longest run of weekly gains since May amid signs of rising U.S. fuel demand and easing crude production.
Futures gained as much as 2.7 percent in New York and are set for a fourth weekly advance. Gasoline consumption the past four weeks was at the highest level since September, while crude output remained near the least since November 2014, according to data from the Energy Information Administration Wednesday. Stockpiles still remain at the most since 1930. A measure of price volatility Thursday closed near the lowest in two months.
“The EIA numbers show that consumer demand from cheap oil is helping to rebalance the market, slowly but steadily,” Angus Nicholson, an analyst at IG Ltd. in Melbourne, said by phone. “Low prices are having an effect on output and it looks like the end of the $20 a barrel level.”
Oil has recouped its losses this year after slumping to a 12-year low last month amid speculation stronger demand and falling U.S. production will ease a supply glut. The price plunge is still having an affect on energy producers, with Anadarko Petroleum Corp. cutting about 1,000 jobs after plans to park drilling rigs, slash dividends and sell assets.
West Texas Intermediate for April delivery added as much as $1.02 to $38.86 a barrel on the New York Mercantile Exchange, and traded at $38.71 at 1:38 p.m. Hong Kong time. The contract fell 45 cents to $37.84 on Thursday. Total volume traded was about 30 percent above the 100-day average. Prices are up 7.8 percent this week.
Brent for May settlement climbed as much as 85 cents, or 2.1 percent, to $40.90 a barrel on the London-based ICE Futures Europe exchange. The contract lost $1.02 to $40.05 on Thursday. Prices are up about 5.5 percent this week for a third weekly advance. The global benchmark crude was at a premium of 53 cents to WTI for May.
U.S. gasoline demand averaged 9.33 million barrels a day during the past four weeks, according to EIA data. Supplies of the fuel slid to 250.5 million last week. Nationwide crude stockpiles rose by 3.9 million barrels to 521.9 million.
Low prices continue to impact companies:
* Anadarko joins U.S. shale drillers from Devon Energy Corp. to Chesapeake Energy Corp. in reducing jobs and spending to weather the energy rout.
* BP Plc plans to cut the number of active oil rigs in Alaska’s Prudhoe Bay to two from five this year.
* Mexico oil service provider Cotemar to layoff 2,300 workers after Pemex canceled two contracts amid budget cuts.