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Oil Ends Week Lower, But Reclaims $80 on Bets Supplies to Remain Tight -Breaking


© Reuters.

By Yasin Ebrahim – Crude settled higher Friday, as bullish bets resumed amid expectations major oil producing nations will continue to allow surging oil prices to go unchecked after voting to keep production steady earlier this week.

On the New York Mercantile Exchange for January delivery gained 2.46 to settle at $81.27 a barrel, while on London’s Intercontinental Exchange (NYSE:), added $2,2 to settle at $82.74 a barrel.

Expectations the U.S. could tap its strategic petroleum reverses to curb the spike in energy prices – following OPEC and its allies’ decision to keep production – were quickly dismissed, reinforcing expectations that oil supplies will remain tight.

“In our opinion, however, the idea that this would prompt the US – as some have speculated – to release some of its strategic oil reserves is not very likely, and will ultimately be up to the US president to decide,” Commerzbank (DE:) said in a note.

Thursday’s meeting of OPEC, Russia and other allies included Russia was a commitment to continue with their plans for gradual increases in oil production to 400,000 barrels per day by the end of next month.

White House was unhappy with the decision and a spokesperson suggested that the administration is prepared to employ a variety of tools in order to address the rising gas prices.

A further indicator of lower output is the oilfield services firm Baker Hughes Co (NYSE: ) announced that its U.S. weekly rig count increased by six to 551 The rising rig count, which indicates tightening crude production, didn’t do much to ease concerns over tightening supply outlook.

As the Energy Information Administration, and OPEC release their next-weekly reports, it will be clear that there is a supply/demand imbalance.

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