Hong Kong - Oil pared the biggest weekly decline in more than two months as a weaker dollar bolstered the appeal of commodities, countering concerns that global oversupply will take more time to clear.
Futures rose as much as 1.3 percent in New York, trimming this week’s decline to 4.8 percent. The Bloomberg Dollar Spot Index dropped for a third day, and global stocks rebounded from a four-week low amid speculation the U.K. is less likely to vote to exit the European Union. Still, low crude prices may persist for 10 to 15 years, Russian Oil Minister Alexander Novak said in a Bloomberg television interview.
Oil’s advance from the lowest level in more than 12 years in February has stalled on speculation higher prices will encourage more US output just as global disruptions ease. ConocoPhillips has restarted almost three-quarters of oil-sands wells at its Surmont facility in Canada after wildfires forced producers to halt output.
“There is some rebalancing, and I believe the oil price will be in the region of $50, maybe $55 for the rest of the year,” Paolo Scaroni, deputy chairman at NM Rothschild & Sons and former chief executive officer of Eni SpA, said in a Bloomberg television interview. “I personally believe there is a cap. If prices go beyond $60, shale oil producers will start all over again.”
Commodities advanced with the pound as campaigning in Britain’s referendum on European Union membership was suspended a second day following the killing of Jo Cox, a Labour lawmaker who was an advocate for staying in the EU.
West Texas Intermediate for July delivery rose as much as 58 cents to $46.79 a barrel on the New York Mercantile Exchange and was at $46.74 at 9:34 a.m. London time. The contract slid $1.80 to $46.21 Thursday, the lowest close since May 13. Total volume traded was 6.1 percent above the 100-day average.
Brent for August settlement gained as much as 81 cents, or 1.7 percent, to $48 a barrel on the London-based ICE Futures Europe exchange. The contract on Thursday fell $1.78 to $47.19, the lowest close since May 10. Prices are down 5.1 percent this week. The global benchmark crude traded at a 61-cent premium to WTI for August.
There are risks that oil prices will fall if production in Canada, Libya or Nigeria rebounds after supply disruptions in those countries, Russia’s Novak said Thursday in St. Petersburg. At current prices, US shale output will probably start recovering early next year, he said.
BLOOMBERG