Oil traded near $45 a barrel in New York at the end of a week of wide price swings amid an uncertain outlook for the global economy in 2019.
West Texas Intermediate futures were up 0.6 percent after sinking 3.5 percent on Thursday. A key volatility gauge soared to the highest in more than a month as crude became increasingly entangled with other financial markets. U.S. government data later Friday is expected to show crude stockpiles shrank last week, though an industry body is said to have reported a surprise jump.
“Year-end trading has been volatile before, and at this moment in time we do not want to be too quick in reading a whole lot into the price action of the last few days,” said analysts at consultant JBC Energy GmbH in Vienna.
A flight from risk assets worldwide amid an array of catalysts — from higher interest rates to political turmoil in Washington and President Donald Trump’s trade war with China — is weighing on crude, set for its biggest quarterly loss since 2014. America’s surprise decision to grant sanctions waivers to some buyers of Iranian oil pushed prices into a bear market from a four-year high in early October.
WTI crude for February rose 26 cents to $44.87 a barrel on the New York Mercantile Exchange at 12:43 p.m. London time. The contract fell $1.61 to $44.61 on Thursday. Total volume traded Friday was 21 percent above the 100-day average.
A measure of oil-market volatility jumped to the highest level since Nov. 23, having more than doubled in the past three months. Just this week, WTI tumbled 6.7 percent on Christmas Eve, only to bounce back by 8.7 percent on Boxing Day and then slump 3.5 percent in the next session.
Brent for February settlement, which will expire Friday, slipped 10 cents to $52.06 a barrel on London’s ICE Futures Europe exchange. The more-active March contract dropped 14 cents to $52.59. February futures traded at a $7.22 premium to WTI for the same month.
Uncertainty has rattled risk assets and volatility has prevailed in equity markets. The U.S.’s S&P 500 Index posted its biggest upward reversal since 2010 on Thursday, a day after its largest advance since 2009. Despite the two-day gain, the measure is still down almost 10 percent in December. European stocks rallied on Friday with the Stoxx Europe 600 Index rising as much as 2 percent.
The American Petroleum Institute was said to report that nationwide crude inventories increased by 6.92 million barrels last week, contrasting with a Bloomberg survey that showed a 3.4 million-barrel decline. Official government figures are due Friday.
Other oil market news: China is the latest victim of the wild swings in oil prices that have roiled trading firms across the globe this year. Two top officials at Unipec, one of the country’s most powerful trading companies, were suspended this week following losses on bets related to crude prices in the second half of the year. Russia, which is part of the OPEC+ coalition of nations, signaled it may ramp up production in the second half of 2019 if the group doesn’t extend its deal.