Oil’s Up for Another Week as Libya Woes Add to U.S. Supply Dive

Crude rose for a second week as American supplies drain and a key Libya oil field was shut.

News of a production halt at Libya’s 70,000 barrel-a-day El-Feel field helped cap a weekly drop of more than 3 percent, after a report Thursday showed storage tanks at the Cushing, Oklahoma, hub are at their lowest levels since 2014 as exports of U.S. crude surge.

“Yesterday’s inventory report was very bullish for crude oil,”  John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by telephone. The decline of stockpiles “is starting to turn into a potentially critical situation that could be very supportive” for West Texas Intermediate crude prices, plus “the trouble in Libya seems to be on the upswing,” he said.

The rapid decline in American stockpiles and growing demand for crude from the country’s booming shale fields are helping reassure the market that production cuts led by the Organization of Petroleum Exporting Countries are working. The global oil market is re-balancing and the decline in inventories is expected to continue this year, Saudi Arabia Energy Minister Khalid Al-Falih told reporters in New Delhi Friday.

West Texas Intermediate for April delivery rose 78 cents to settle at $63.55 a barrel on the New York Mercantile Exchange, the highest level in more than two weeks. Total volume traded was about 26 percent below the 100-day average.

Brent for April settlement climbed 92 cents to settle at $67.31 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a $3.76 premium to WTI.

U.S. crude exports surpassed 2 million barrels a day last week for only the second time on record, according to Energy Information Administration data Thursday, while stockpiles at Cushing shrank for a ninth straight week to 30 million barrels. Crude production edged lower for the first time since early January.

“We probably have a little more strength to go,” in terms of upside potential for prices, John Macaluso, a trader at Tyche Capital Advisors LLC in New York, said by telephone. “Production, while still up, has tailed off.”

Other oil-market news:

The U.S. oil rig count rose for a fifth week, up by 1 to 799, the highest since April 2015, according to Baker Hughes data on Friday. Top Trump administration officials are planning two summits to discuss possible changes to the U.S. biofuel mandate, according to people familiar with the discussions, as the White House grapples with political fallout from the bankruptcy of the largest refiner in the Northeast. Gasoline futures in New York rose 3.3 percent this week.