Oil set for weekly loss as United States shale boom counters IEA warning

Oil set for weekly drop on rising global supply undermining Opec cuts

Oil set for weekly drop on rising global supply undermining Opec cuts

"Looking forward to next week, the Saudi crown prince will be in Washington with the potential for more strong rhetoric against Iran that could add support and volatility", Jakob of PetroMatrix said.

Futures in NY jumped 1.9 percent on Friday, driving the US benchmark to post a 0.5 percent rise this week after a shaky start on Monday and Tuesday.

West Texas Intermediate for April delivery traded at US$61.19 a barrel on the New York Mercantile Exchange at 11:04am in Tokyo. It was the second straight weekly rise for both contracts.

"You've got a lot going on, on the world stage," Tamar Essner, an analyst at Nasdaq Inc.in NY, said by telephone.

Gains on Wall Street also supported prices as crude futures have recently been moving in tandem with USA stock indices.

On Thursday the International Energy Agency (IEA) said global oil demand is expected to pick up this year but supply is growing at a faster pace, leading to a rise in inventories in the first quarter of 2018. While US crude production jumped to 10.4 million barrels a day last week, according to government data, the dire situation in Venezuela's energy sector may exacerbate a worldwide supply deficit expected later this year, the Paris-based IEA said.

The IEA also said supply from producers outside Opec, led by the U.S., would grow by 1.8-million bpd this year from an increase of 760,000 bpd last year.

Meanwhile, the Organization of Petroleum Exporting Countries and allied producers are continuing production cuts in an effort to drain a global glut.

Market participants will be watching for the rig-count data from Baker Hughes Inc. later on Friday.

Sallee added that he expected the data to show a small pickup in rig counts. While demand has yet to catch up to elevated supplies, rebounding economies in Europe and steady economic growth in the USA could prompt more upside for oil this year.

Political risk linked to Tehran increased after Rex Tillerson was sacked as USA secretary of state in favor of an Iran and North Korea hawk, and the crown prince said Riyadh would develop nuclear weapons if Iran - its arch-rival - did so.

Saudi Arabia's planned initial public offering of its national oil company, tentatively scheduled for 2018, has been the driving force behind OPEC's attempt to rebalance the market, analysts said.

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