Oil Rises Ahead of OPEC Meeting

By Alison Sider and Christopher Alessi Features Dow Jones Newswires

Oil futures pushed higher Friday as investors looked ahead to a planned meeting of the Organization of the Petroleum Exporting Countries next week.

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U.S. crude futures rose 55 cents, or 1.12%, to $49.58 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 41 cents, or 0.79%, to $52.42 a barrel on ICE Futures Europe.

Oil prices have been pinging back and forth within a narrow range in recent days. The U.S. benchmark settled above $50 a barrel on Monday and has approached that level again at times this week, but hasn't gained traction for a sustained move higher.

The U.S. benchmark ended the week slightly lower, down 13 cents, while Brent gained 20 cents during the week.

"The market made another attempt to move through $50 terms and failed to attract any new buying," said Gene McGillian, research manager for Tradition Energy. "To drive prices higher, we need to see signs the cut is reducing the excess supply overhang in market," he said, referring to production cuts implemented earlier this year by OPEC and other major exporters.

Upbeat data on U.S. hiring -- a signal of economic strength that could portend greater demand for oil -- likely helped support prices Friday, analysts said. But at the same time, the U.S. dollar also rallied on that data, which could become a drag on crude. A stronger dollar makes commodities like oil, which are priced in the U.S. currency, more expensive for foreign buyers.

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"The dollar is going higher, but we think crude will end up going lower because of that," said Mark Waggoner, president of Excel Futures. Oil is "at the top of the range. The question is how long are we going to stay up here?" Mr. Waggoner said.

OPEC officials will meet early next week in Abu Dhabi, where the main topic will be member compliance with a deal to cut production. Preliminary data have shown that OPEC output continued to rise in July.

"I wouldn't expect too much other than the normal platitudes" about all the players needing to show compliance, said Tom Pugh, a commodities economist at Capital Economics, of the coming cartel gathering.

However, Mr. Pugh said investors would be looking for harsher language from Saudi Arabia -- the cartel's largest member and the world's biggest exporter -- on lax compliance by Iraq and the United Arab Emirates. He said investors would also hope that Libya would join Nigeria in voluntarily capping its output. Both countries were exempt from the original deal.

OPEC's members and 10 producers outside the cartel, including Russia, first agreed last November and December to cap their production at around 1.8 million barrels a day below October 2016 levels. The goal was to drain a global oversupply that has kept prices depressed, but the market has remained subdued, in part because U.S. production continues to rise.

Gasoline futures rose 1.44 cents, or 0.88%, to $1.6436 a gallon. Diesel futures rose 0.97 cent, or 0.59%, to $1.6486 a gallon.

Write to Alison Sider at alison.sider@wsj.com and Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

August 04, 2017 16:03 ET (20:03 GMT)