Oil prices settle lower, but tally a gain of 4% for the week

By Myra P. Saefong

Upside breakout shows 'path of least resistance' higher right now, chart watchers say

Oil futures finished with a loss on Friday, easing back a day after climbing to a four-month high - but prices still posted a weekly gain of 4%, buoyed by a drop in U.S. crude inventories and a stronger demand forecast from the International Energy Agency.

Drone attacks on Russian energy facilities by Ukraine and a continued pledge by major oil producers to voluntarily cut production also helped lift crude prices this week, analysts said.

Price moves

West Texas Intermediate crude CL00 for April delivery CL.1 CLJ24 fell 22 cents, or 0.3%, to settle at $81.04 a barrel on the New York Mercantile Exchange, for a 3.9% weekly gain, according to Dow Jones Market Data.May Brent crude BRN00 BRNK24, the global benchmark, edged down by 8 cents, or about 0.1%, at $85.34 a barrel on ICE Futures Europe, leaving it up 4% for the week.April gasoline RBJ24 added nearly 0.7% to $2.72 a gallon, for a weekly rise of 7.7%, while April heating oil HOJ24 climbed 0.7% to $2.73 a gallon, gaining 3.3% for the week.Natural gas for April delivery NGJ24 settled at $1.66 per million British thermal units, down 4.9%, with Friday's losses contributing to an 8.3% loss on the week.

Market movers

Losses for front-month futures for WTI and Brent crude on Friday followed gains a day earlier that lifted prices for both to their highest settlements since Nov. 2.

"The indicative smooth uptrend suggests that the wildest part of the rally is yet to come," said Alex Kuptsikevich, senior market analyst at FxPro, in emailed commentary.

Read: Cocoa prices hit another record, sweetening a broad rally for commodities

"The medium-term uptrend in oil began at the December lows," he said, adding that at that time, oil was "actively bought in attempts to break below the 200-week moving average." Touching this mark was also a "turning point in 2023, kicked off a strong rally in 2020, and provided crucial support in 2019."

It's important to note, however, that this "isn't just a technical level," as the Organization of the Petroleum Exporting Countries and Russia have increased support for the price over the past five years by announcing quota cuts to break through that technical level, said Kuptsikevich.

Among other supportive factors, the Paris-based IEA on Thursday said it now sees growth of 1.3 million barrels a day, or mbd, versus a previous forecast of 1.2 mbd.

Crude prices had climbed sharply Wednesday after data from the Energy Information Administration showed a fall in U.S. crude inventories last week.

Attacks on Russian energy infrastructure and continued uncertainty tied to the Israel-Hamas war also contributed to the rise in oil prices, analysts said.

Read: Why drone attacks in Russia could drive U.S. gas prices higher

"Bottom line, an early 2024 rally has emerged in the oil market after months of consolidation in the upper $60s to low $70s, and yesterday's new closing high above $81/barrel (for WTI), a four-month high, helps to technically reiterate that the path of least resistance is higher right now," analysts at Sevens Report Research said in a note.

"The slew of bullish fundamental news paired with the bullish demand details in Wednesday's weekly EIA report all are supportive of a continued move higher in oil," they wrote.

-William Watts contributed.

-Myra P. Saefong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-15-24 1546ET

Copyright (c) 2024 Dow Jones & Company, Inc.