MW: Oil ends slightly higher, but drops 13% on the week
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Oil futures ended slightly higher Friday, but posted a weekly loss of 13%, as analysts expressed doubt about whether oil prices can stage a significant rebound in the face of slumping energy demand.
In volatile trading, crude oil for January delivery rose 51 cents to end at $49.93 a barrel on the New York Mercantile Exchange.
For the week, however, crude futures fell $7.67, or 13%, from last Friday's closing level of $57.60.
"I think oil is due to continue lower," said Zachary Oxman, a senior trader at Wisdom Financial. "The downtrend is firmly in place, and with a slacking of demand, I'd expect oil to continue down toward $40."
On Thursday, oil slumped 7.5% to close at its lowest level since May 2005.
"It is difficult to get upbeat about the prospect of buying practically anything these days, as the downside pressure in all markets is unrelenting," Edward Meir, an analyst at MF Global, said in a note.
On Wall Street, U.S. stocks posted gains, rebounding from the prior day. See Market Snapshot.
On Thursday, U.S. stocks stumbled to 11 1/2-year lows as hopes faded for a rescue for automakers and as concerns grew about Citigroup's financial health.
Earlier Friday, the oil contract hit an intraday high of $51.12 on Globex.
Oil's bump up was helped by "hopes Asian central banks will announce measures to help revive economic growth," analysts at Sucden Research said in a note.
The Bank of Japan's Policy Board voted unanimously Friday to hold its key overnight call rate unchanged at 0.3% and said it would consider new measures to help inject more cash into the financial system. Read more.
Most Asian markets sprang from sharp intraday losses to end higher Friday, with trader speculation that China may cut rates further contributing to the bounce.
OPEC meeting ahead
Oil traders are awaiting the upcoming meetings of the Organization of Petroleum Exporting Countries. The oil cartel will meet on Nov. 29 in Egypt and again on Dec. 17 in Algeria.
"So far, it appears that the Saudis would prefer to wait until the Dec. 17 meeting before announcing cuts," said Robert Johnston, an energy analyst at Eurasia Group. Saudi Arabia is the largest oil producer in OPEC.
"However, a high level of compliance with the October cuts and the continued price collapse likely increases Saudi willingness to take on further cuts, whether in November or December," Johnston said.
Analysts at Saxo Bank said that "OPEC is stuck between a rock and a hard place as a production cut of 2.5 million barrels a day is needed to reduce the oversupply, but at the same time their revenues are falling from lower prices."
From a technical standpoint, next week will be very important, the analysts said in a research note.
"We will be watching $56 and more importantly $61 on the January WTI [West Texas Intermediate] crude contract as potential bullish indicators."
Also on the Globex Friday, January reformulated gasoline gained 5 cents to end at $1.09 a gallon and January heating oil rose 2 cents to $1.71 a gallon.
December natural-gas futures rose 16 cents to end at $6.48 per million British thermal units.
