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Crude oil futures - weekly outlook: April 27 - May 1

Published 26/04/2015, 12:15
© Reuters.  Brent oil futures end the week up 2.9% on Middle East violence
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Investing.com - Crude oil futures were mixed on Friday, with London-traded Brent prices hitting the highest level of the year, while New York oil futures ended modestly lower as investors cashed out of the market to lock in gains from a recent rally.

On the ICE Futures Exchange in London, Brent for June delivery hit an intraday peak of $65.80 a barrel, the most since December 10, before ending at $65.28 by close of trade on Friday, up 43 cents, or 0.66%.

For the week, London-traded Brent futures rose $1.43, or 2.88%, the third straight weekly advance.

Saudi Arabia resumed its air strike campaign against Iran-backed Houthi rebels in Yemen on Friday, renewing concerns over the security of Middle East oil shipments.

Brent futures are up more than 16% so far in April as some investors bet that a bottom had been reached after a nine-month long rout. But prices are still down approximately 43% since June, when futures climbed near $116.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in June shed 59 cents, or 1.02%, to settle the week at $57.15 a barrel.

On the week, New York-traded oil prices declined 60 cents, or 0.3%, halting four straight weeks of gains.

U.S. oil futures have risen almost 16% in April due to mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months amid an ongoing collapse in rigs drilling for oil.

Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. fell by 31 last week to 703, the lowest since October 2010. It was the 20th straight week of declines.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $8.13 a barrel by close of trade on Friday, compared to $7.71 in the preceding week.

In the week ahead, market players will focus on the conclusion of the Federal Reserve's two-day monetary policy meeting on Wednesday, which could provide indications on how soon it might raise interest rates.

Investors will also be looking ahead to preliminary data on first quarter U.S. growth figures for further indications on the strength of the economy.

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