US crude surges $3.71/bbl on pre-weekend buying

HOUSTON (ICIS)–NYMEX light sweet crude for March delivery settled at $48.24/bbl, up $3.71, on Friday, on aggressive short-covering ahead of the-weekend and end-of-the-month booksquaring.

After hitting a low of $43.58/bbl earlier in the week while factoring in the weekly supply statistics from the US Energy Information Administration (EIA) showing US oil inventories hitting record highs, a correction to oversold conditions was expected.

Validating the fact that low oil prices were hitting the industry hard, a late report showing a decline in the number of oil rigs was expected to start affecting the drilling.

The correction ignored the US dollar continuing to firm against the euro and the stock market posting modest losses.

Aggressive short-covering lifted March crude to hit $48.35/bbl, up $3.82, before the upside was exhausted and levels eased on late profit taking.

ICE Brent for March delivery joined the feeding frenzy, establishing the session’s high at $53.08/bbl, before settling at $52.99/bbl, up $3.86.