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Futures Movers: Oil prices head for another strong weekly gain as supply worries dominate

Oil prices were higher on Friday and headed for another strong weekly gain, as supply worries returned to the fore.

Price action
  • West Texas Intermediate crude for June delivery  CL.1, +1.28% CL00, +1.28% CLM22, +1.28% rose $1.49, or 1.3%, to $109.75 a barrel on the New York Mercantile Exchange.
  • July Brent crude BRN00, +1.15% BRNN22, +1.15%, the global benchmark, rose $1.31, or 1.2%, to $112.21 a barrel on ICE Futures Europe.
  • June natural-gas futures  NGM22, -8.70% retreated 7% to $8.164 per million British thermal units. The contract jumped 4.4% to close at $8.783 per million British thermal units on Thursday, its highest finish since Aug. 1, 2008.
  • June gasoline  RBM22, +3.28% jumped 3% to $3.769 a gallon, while June heating oil HOM22, -0.85%  pulled back 0.8% to $4.008 a gallon.
Market drivers

Both West Texas Intermediate and Brent crude were poised for weekly gains of nearly 5%, marking the third straight weekly gain for each, according to FactSet.

“In addition, the EU ban on Russian oil imports and a surprise U.S. announcement about starting to refill its SPR [strategic petroleum reserves] already this autumn also underpinning the price,” said Ole Hansen, head of commodity strategy at Saxo Bank.

In Brent, the next level of resistance is the April high around $115 with support at $110, he said.

Oil futures remained higher after Baker Hughes said the number of U.S. oil rigs rose by 5 this week to 557, while gas rigs were up 2 to 146.

Analysts said an upswing for oil on Thursday was curbed by the strong selloff for Wall Street stocks and dollar strength. The latter can serve as a headwind for dollar-priced commodities, making them more expensive compared than those based in other currencies.

Read: This trader predicted the bond meltdown, tech selloff and oil’s surge. She sees $260 oil within a year.

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