Energy

US crude edges up to close at $44.74, but posts 4th straight weekly loss on oversupply concern

A truck drives past pump jacks north of Ufa, Bashkortostan, Russia.
Sergei Karpukhin | Reuters

Oil prices edged up on Friday from 2017 lows, but posted a fourth week of losses as OPEC-led production cuts failed to allay concerns over global oversupply.

Oil prices hit six-month closing lows on Thursday and have tumbled more than 12 percent from late May when producers led by the Organization of the Petroleum Exporting Countries extended a pledge to cut output by 1.8 million barrels per day (bpd) for six months by another nine more months.

U.S. West Texas Intermediate (WTI) crude futures finished Friday's session at $44.74 per barrel, up 28 cents. They were down 2.4 percent on the week.

Brent crude futures were up 41 cents at $47.33 per barrel by 2:34 p.m. ET (1834 GMT). They fell as low as $46.70, the weakest level since May 5, in the previous session.

"It's going to be difficult to have a rally unless there's a disruption or some news from OPEC," said Olivier Jakob, managing director with PetroMatrix.

Oil expected rise after big fall
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Oil expected rise after big fall

Non-OPEC member Russia is expected to export 61.2 million tons of oil via pipeline in the third quarter, equivalent to about 5 million bpd, against 60.5 million tons in the second quarter, according to industry sources and Reuters calculations.

Kazakhstan, which agreed to cut supplies last year as part of the non-OPEC bloc, said it would reduce production in June and July after overproducing for three months in a row.

But OPEC members Nigeria and Libya, which are exempt from the deal, have increased exports as they bounce back from supply disruptions caused by protests, rebel activity and mismanagement.

In latest sign of crude glut, aging supertankers are being used to store unsold oil off Singapore and Malaysia.

Rising U.S. crude output has also undermined the impact of OPEC-led cuts, as production has risen more than 10 percent in the past year.

Reasons for the drop in oil
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Reasons for the drop in oil

Data from the U.S. Energy Information Administration (EIA) this week showing growing gasoline stocks and shaky demand, despite the peak summer driving season, sent prices tumbling.

The number of U.S. oil drilling rigs in operation rose by 6 to 747 in the week to June 16, oilfield services firm Baker Hughes reported on Friday. Drillers added rigs for a 22nd consecutive week as part of a year-long recovery after prices pulled back from a two-year rout to above $50.

However, the pace of additions have slowed and lower oil prices are set to test U.S. shale drillers.

Eight prominent hedge funds have reduced the size of their positions in ten of the top shale firms in the Permian, the largest U.S. oilfield, by over $400 million, concerned that producers are pumping oil so fast they will undo the nascent recovery in the industry.

— CNBC's Tom DiChristopher contributed to this story.