Brent crude futures held above $60 a barrel on Friday as strong U.S. economic data supported the market, but oil prices were track for their fifth straight weekly decline as a building supply glut capped gains.
On the supply side, data suggested an increasing glut as U.S. data showed crude inventories unexpectedly rose by 7.3 million barrels last week to their highest December level on record. Analysts had expected a seasonal draw. [EIA/S]
Yet on the demand side there was price supporting data as the U.S. Labor Department said weekly jobless claims fell for the fourth straight week and the Commerce Department's final estimate of U.S. third-quarter economic growth indicated the quickest pace in over a decade.
Front-month Brent crude prices were trading at $60.50 at 0319 GMT, up 26 cents, while U.S. WTI's front-month contract was up 32 cents at $56.16 a barrel in thin trading as many countries were still on Christmas holiday.
"Prices seem adamant on staying above support levels, and it seems they will hold for this festive season," Singapore-based Phillip Futures said on Friday in a note.
"Normally, positive stockpile data of this magnitude would surely have broken support levels. However, it seems there is not enough downward pressure to keep prices down," it said.
"We continue to attribute this to the short-covering at the end of the year as oil bears close out positions to celebrate the New Year," Phillip Futures added.
Uncertainty around whether Brent can hold above $60 or not and lower liquidity toward the end of the year meant that price volatility has risen to levels this month last seen in 2012.
Brent is down more than a percent for the week, while U.S. crude was heading for a smaller 0.7 percent drop.
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