Oil rose slightly on Friday on increased buying ahead of the weekend, but a strong U.S. dollar and lingering doubts that not all OPEC producers would cut output in line with an agreement, pressured prices.
Top oil exporter Saudi Arabia, along with fellow Gulf members Abu Dhabi and Kuwait, have shown evident commitment and signs of cutting production in line with an agreement reached between OPEC and other producers, market watchers have doubts about the overall compliance of other members.
Saudi Arabia’s state oil producer Saudi Aramco has started talks with customers globally on possible cuts of 3 percent to 7 percent in February crude loadings.
According to Reuters, end of week position-squaring combined with relatively low volumes during the first trading week of the year led to the market being choppy, traders said.
Brent crude futures were trading 19 cents higher at $57.08 per barrel at 11:34 a.m. EST (1634 GMT), after moving in a $56.28-to-$57.47 range.
U.S. West Texas Intermediate (WTI) crude futures rose 24 cents at $54.00 a barrel, after trading between $53.32 and $54.32.
The contracts were on track for a slight gain on the week. “There’s a lot of volatility, or at least changes in direction,” ABN Amro senior energy economist Hans van Cleef said. “People think the long-term trend is up, but after a gain of a few dollars, they take profit.”
The dollar gained broadly against major currencies after the U.S. non-farm payrolls report showed a slowing in hiring in December but an increase in wages, setting the economy up for further interest rate increases from the Federal Reserve this year.