Crude oil on track for weekly gain despite glut
Crude futures held steady around $49 in early Friday trading, poised to post the first weekly gain in three weeks despite a supply glut that has tested storage capacity and hammered company results.
The potential gain, driven by smaller-than-expected builds in U.S. oil stocks, was widely viewed as a temporary boost in a market that is awash with oil and staring down sluggish economic growth in key markets such as the United States and China.
Brent crude traded 10 cents higher at $48.90 a barrel at 0940 GMT, set for a nearly 2 percent weekly increase. U.S. crude was down 10 cents at $45.96 a barrel, on track to post a gain of nearly 3 percent on the week.
Traders said a rally earlier in the week sparked by a 3.4-million-barrel crude build reported by the U.S. Energy Information Administration provided the sole support for the weekly increase. [EIA/S]
But bearish data quickly followed, tempering the gains. U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut. Weak home sales soured the mood further.
China's Ministry of Commerce announced on Friday a doubling in the country's crude oil import quota for 2016, but concerns about shaky growth in the world's largest energy consumer lingered.
Oil executives, smarting from a 50 percent slide in prices since last year, saw little relief. Oil companies reported a dramatic drop in third-quarter income, with some falling to a loss, and said the pressure could persist through 2016.
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