Brent oil held above $108 a barrel yesterday, heading for its biggest weekly gain since early July on expectations the Federal Reserve will stick with its easy money policy for now.
Unrest in Libya has also supported oil prices, with output down to a fraction of its production capacity of 1.25 million barrels a day. Protests at oil ports have cost Libya more than $6bn and started hitting power supplies in the North African country.
Libya will keep the market on edge for some time, but attention will today turn to macro headlines, Andrey Kryuchenkov of VTB Capital said.
Janet Yellen, likely to be the next Fed chief, defended the US central bank’s commodity-friendly stimulus measures on Thursday, suggesting any tapering would not be imminent if she takes the job.
Brent crude was up seven cents at $108.35 a barrel at 1424 GMT and looked set for a weekly gain of more than 2.5 percent. US crude was up 57 cents at $94.33.
While the comments from Yellen provided a boost to risk appetite with most commodities and equities scaling higher, high stockpiles kept US crude in check.
Data from the US Energy Information Administration showed crude inventories in the United States rose by 2.6 million barrels in the week ended November 8, far more than the one million barrels analysts surveyed by Reuters had expected.
Brent’s premium to US oil futures was more than $13 per barrel after reaching an eight-month high of $15.87 on Thursday.
The oil complex remains in a tug of war between the bears who are focused on the growing US crude oil surplus versus the bulls who are focused on the over three million barrels per day of crude oil that remains shut in in various producing countries due to geopolitical events in those countries, said Dominick Chirichella of Energy Management Institute.