LONDON: Brent crude had its best week in two years, helped by Saudi production cuts and positive US jobs data.
The global benchmark gained almost 10 percent this week after three consecutive weeks of declines.
Despite the rally, markets remain jittery and focused on the outcomes of talks between the US and China aimed at ending an ongoing trade war.
“Underpinning this wave of buying is mounting evidence that Saudi Arabia has taken an axe to its oil production,” Stephen Brennock, an analyst at PVM Oil Associates, told Bloomberg.
The oil market is coming off its worst quarter in four years after prices fell by a fifth last year over concerns about a global glut of crude oil.
Saudi Arabia, the world’s biggest crude exporter, trimmed production last month, bringing overall output in OPEC down 530,000 barrels per day (bpd) to 32.6 million a day, according to a Bloomberg survey of officials, analysts and ship-tracking data.
Positive jobs data from the US published on Friday helped to lift the Brent oil price above $57 and helped to distract the market from worries about domestic demand in China as well as the country’s trading relationship with the US.
Oil has risen for five sessions amid hopes that the US. and China are working toward reconciling trade tensions.
China said a US delegation will visit next week for trade talks, which boosted market sentiment.
“Recent Chinese data is not confirming the doom-and-gloom trend,” said Olivier Jakob, oil analyst at Petromatrix. “And you’ve got OPEC cutting.”
Saudi Arabia raised pricing for most crude grades to Asia and for all blends to buyers in the US for delivery in February, Bloomberg reported.
A survey by Reuters on Thursday found OPEC supply fell by 460,000 bpd in December.
“The market is likely to take some comfort from the fact that crude oil production from the OPEC+ will continue to drop,” said Ole Hansen of Saxo Bank.
US employers lifted their hiring in December, according to data published on Friday. The US added 312,000 jobs, beating expectations.
The Labor Department said that the unemployment rate also rose slightly to 3.9 percent, but that the rise reflected an increase in jobseekers.