​WTI jumps to Friday close at $62 on ‘sideways trading’

Crude ended Friday higher after a curious, late-morning spike left analysts scratching their heads.

The market was little changed during morning hours of trading, but rocketed upwards just before 11:30 a.m. in New York, with no news catalyst identified by traders and analysts. The U.S. benchmark crude ended the session 1.9 percent higher on Friday, driving futures to post a 0.5 percent rise this week.

“When the market falls into sideways trading in a band, you get a lot of price fluctuations that you have to turn a blind eye to,” said Gene McGillian, a market research manager at Tradition Energy in Stamford, Connecticut. “This area between $58 and $64, the market inside that, is still consolidating and looking for signals.”

While the Organization of Petroleum Exporting Countries and allied producers trim output to tighten global markets, an ongoing rise in U.S. crude production threatens to block OPEC’s efforts. However, the International Energy Agency said this week that the decline in Venezuela’s oil output could exacerbate a global supply deficit later this year.

West Texas Intermediate for April delivery advanced $1.15 to settle at $62.34 a barrel on the New York Mercantile Exchange, the highest level in more than a week. Total volume traded was about 25 percent below the 100-day average.

Brent for May settlement climbed $1.09 to end the session at $66.21 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a $3.80 premium to WTI for the same month.

While record U.S. production beyond 10 million barrels a day has weighed on oil’s rebound, a sense of uncertainty was heightened by a slew of recent events like the firing of Rex Tillerson as U.S. secretary of state, the potential delay of Saudi oil giant Aramco’s initial public offering, talks of a trade war and expectations that Venezuelan production will plunge.

“You’ve got a lot going on, on the world stage,” Tamar Essner, an analyst at Nasdaq Inc. in New York, said by telephone. “The more unexpected elements of this week’s developments were on the macro, international, geopolitical front. We are setting ourselves up for a little volatility ahead.”

© 2018 Bloomberg L.P