Brent crude rose as high as $64.32 a barrel, the day after OPEC and other crude producers agreed to extend output cuts until the end of 2018 to tighten global supplies and support prices.
NEW YORK: Oil prices settled up slightly on Friday, but came off session highs as financial markets reeled from an ABC News report that added to concerns about President Donald Trump's exposure to a probe into Russian meddling in last year's campaign.
Brent crude rose as high as $64.32 a barrel, the day after OPEC and other crude producers agreed to extend output cuts until the end of 2018 to tighten global supplies and support prices.
But oil pared gains as Wall Street stocks slid following an ABC report that former national security adviser Michael Flynn was prepared to tell investigators that prior to taking office, Trump directed him to make contact with Russians. [.N]
Reuters has not verified the ABC News report, which cited a Flynn confidant. Flynn also pleaded guilty on Friday to lying to the FBI.
"Oil prices have pared earlier gains in tandem with losses seen in the equity market partly because (of) news regarding Michael Flynn," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.
Brent futures settled at $63.73 a barrel, putting the new front month February contract up 16 cents from where January expired on Thursday. The February futures contract was up about 1.8 percent from where it closed in the previous session.
U.S. West Texas Intermediate crude gained 96 cents, or 1.7 percent, to settle at $58.36 per barrel. WTI's January contract does not expire till Dec. 19.
Both benchmarks declined for the week, with Brent down less than 1 percent and U.S. down about 1 percent.
Before the Flynn news spooked Wall Street, crude prices were approaching their highest levels since the summer of 2015. On Thurdsay, the Organization of the Petroleum Exporting Countries and some non-OPEC producers led by Russia agreed to extend the output cuts.
The output cuts were due to expire next March. Producers have reduced output by about 1.8 million barrels per day (bpd). The latest agreement allows for producers to exit the deal early if the market overheats.
Russian officials had expressed concern that extending the output cuts might encourage rival U.S. shale firms to pump more crude.
"It leaves a question mark about the second half (of 2018) and about the commitment of Russian oil companies, which will be price dependent," Petromatrix strategist Olivier Jakob said.
The chief executive of Russia's top private producer Lukoil told Reuters he would like to see the price of oil stable at current levels, trading in the $60-65 per barrel range.
Rising U.S. production has been a thorn in OPEC's side. On Friday, U.S. rig count data increased for a second straight week. [RIG/U]
U.S. production rose to 9.5 million bpd in September, its highest monthly output since 9.6 million bpd in April 2015, according to federal energy data going back to 2005. On an annual basis, U.S. output peaked at 9.6 million bpd in 1970. - Reuters
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