Oil ends down on profit-taking but still up strongly on week (updated)

China Aviation Oil (Singapore)

26/02/2016 20:25

* Early rally during session on supply disruptions, Wall St 
gains 
    * Brent up 6 pct on week, U.S. posts 11 pct weekly gain 
    * Traders see more upward momentum for oil in near-term 
 
 (New throughout, updates market activity to settlement) 
    By Barani Krishnan 
    NEW YORK, Feb 26 (Reuters) - Oil prices fell on Friday as 
investors cashed out big weekly profits after a rally driven by 
disruptions to crude supplies and Wall Street's gains from U.S. 
economic data. 
    Prices turned negative soon after the release of weekly U.S. 
oil rig data by industry firm Baker Hughes that showed a 10th 
weekly drop in the rig count. The data was positive to oil, but 
traders and investors chose to lock in profits. 
    "I think a good part of the selling was due to cashing out 
of winning positions people had established earlier in the 
week," said David Thompson, executive vice-president at 
Powerhouse, a commodities-focused broker in Washington. 
     Brent crude  LCOc1  settled down 19 cents at $35.10. It hit 
a high of $37 earlier, a peak since Jan. 5.  
    U.S. crude  CLc1  settled down 29 cents at $32.78 a barrel, 
after gaining almost $1.70 earlier. 
    For the week, Brent was up more than 6 percent after rising 
for four days. U.S. crude rose 11 percent on the week, its 
steepest weekly rise since August. 
    Oil was up from the start of the week after data showing a 
slide in shale crude output and strong gasoline demand in the 
United States. Also bolstering prices was a meeting scheduled 
for mid-March by at least four major oil producers, including 
Saudi Arabia, to discuss a production freeze at January's highs. 
    On Friday, the market initially surged on news that pipeline 
outages in Iraq and Nigeria will remove more than 800,000 
barrels of crude per day from global supply for at least two 
weeks. The disruptions should offset recent increases to supply 
from Iran, analysts said.  urn:newsml:reuters.com:*:nL8N1652GF urn:newsml:reuters.com:*:nL8N16528W 
    Oil was later boosted by the U.S. stockmarket as an upward 
revision to the country's fourth-quarter economic growth drove 
Wall Street's key S&P index near 2-month highs. A raft of other 
U.S. economic data also boosted equity prices, which have moved 
in tandem with oil for weeks.  .N   urn:newsml:reuters.com:*:nLLAQDEC4W 
    Some analysts and traders expect crude prices to continue to 
rise in the near-term, or at least remain volatile. 
    Hans Van Cleef, senior energy economist in Amsterdam for ABN 
Amro, said Brent's break above the $36.25 technical resistance 
indicated "more short covering in the coming days". 
    Jeffrey Grossman, dealer at New York's BRG Brokerage, 
expects to see U.S. crude at over $40 by March-end. 
    Investment bank Jefferies called current prices 
unsustainable, saying output declines among key non-OPEC 
producers will likely spark a recovery by second half 2016. 
 
 (Additional reporting by Libby George in London; Editing by 
Marguerita Choy and David Gregorio) 
 ((barani.krishnan@thomsonreuters.com; +1 646 223 6192; Reuters 
Messaging: barani.krishnan.thomsonreuters.com@reuters.net)) 
 
Keywords: GLOBAL OIL/