Oil headed for a weekly increase as U.S. crude stockpiles dropped further and the nation’s currency weakened.
Futures have climbed 3.8 percent in New York this week after reaching the highest since December 2014 on Thursday. Crude stockpiles fell for a 10th week to the lowest level since February 2015, according to Energy Information Administration data Wednesday. The weaker dollar has made oil more attractive to investors.
Oil resumed gains this week after Saudi Arabia and Russia pledged to continue coordinated supply cuts to drain a global glut. A challenge for the Organization of Petroleum Exporting Countries and its allies is expanding U.S. output, which rose last week to the highest level in more than three decades.
“Oil prices face yet another weekly gain due to the weak U.S. dollar,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
West Texas Intermediate for March delivery was at $65.72 a barrel on the New York Mercantile Exchange, up 21 cents, at 11:02 a.m. in London. Total volume traded was about 9 percent below the 100-day average.
Brent for March settlement added 15 cents to $70.57 a barrel on the London-based ICE Futures Europe exchange after falling 11 cents on Thursday. Prices are up 2.9 percent this week, rebounding from the first weekly drop since mid-December. The global benchmark crude traded at a premium of $4.87 to WTI.
U.S. crude inventories fell by 1.07 million barrels last week to 411.6 million, according to EIA data. Oil production climbed to 9.88 million barrels a day, a record in weekly data compiled by the agency since 1983.
The Bloomberg Dollar Spot Index, a gauge of the currency against 10 major peers, has dropped 1.7 percent this week, heading for the biggest decline since July 2016. A weaker greenback typically increases investors’ interest in commodities.
JPMorgan raised its crude forecast on strong economic growth and a cold snap in the U.S. It predicted Brent will near $78 a barrel in the first half and average $70 this year. The market will return to balance sometime this year, OPEC Secretary General Mohammad Barkindo said on Bloomberg Television. Venezuela’s crude exports may get a boost from moderate near-term upside in production as field maintenance ends and because of lower crude runs at the Amuay refining complex, Vienna-based JBC Energy said Friday.