US crude settles 1.7% higher at $45.70 per barrel

Workers from Select Energy Services at a Hess fracking site near Williston, N.D.
Andrew Cullen | Reuters

U.S. crude oil settled higher on Friday to end the week in positive territory following a choppy trading session.

U.S. West Texas Intermediate (WTI) futures settled up 79 cents, or 1.7 percent, at $45.70 a barrel.

Brent futures were up 45 cents at $48.62 per barrel shortly by 2:36 p.m. EDT (1839 GMT). It had risen almost $1 at the session high, before turning negative prior to the rig count release.

Global rude markets seesawed around break-even much of Friday, jumping 2 percent in early trade on a boost from a Wall Street rally before slipping to near the day's lows.

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Prices ticked back up after the latest weekly reading on the U.S. oil rig count from industry firm Baker Hughes showed a drop of 4 rigs, marking the fourth consecutive drop. A lower U.S. rig count is usually a bullish signal for oil as it suggests potentially lower production in the future.

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Still, some traders and analysts were pessimistic that oil would continue trading higher in the coming weeks due to mixed outlooks for supply and demand and for the global economy.

"I'm predicting a return to the low $40 levels or even below by next month," said Tariq Zahir, a trader in crude oil spreads at Tyche Advisors in Laurel Hollow, New York.

"As U.S. refinery maintenance kicks into full gear, we're going to start seeing inventory builds instead of draws," Zahir said.

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Credit ratings agency Standard & Poor's said that marginal production costs in places such as the United States were poised to fall due to improved drilling efficiencies, meaning production will not decline as steeply as expected.

S&P cut its Brent and WTI forecasts by $5 to $50 per barrel and $45 per barrel respectively for this year and said it saw 2016 prices at $55 for Brent and $50 for WTI.

HSBC said that markets had focused too much on China's slowdown, warning that many developed economies were faltering as well.

"It turns out that developed market imports haven't been anywhere near as robust as relatively upbeat local demand data would suggest ... For all their recent swagger, developed markets are hardly firing on all cylinders. So, don't just blame China," the bank said on Friday.