Crude Oil Surges To End Above $60, Gains 1.1% For Month

(RTTNews) - U.S. crude oil surged to end higher for second straight session on Friday, after U.S. stockpiles declined more than expected last week and on reports of continued decline in active drilling rig count in the U.S.

Crude oil futures gained about 1.1 percent for the month.

Crude oil prices snapped back with traders opting for some bargain hunting in the morning after a significant pullback earlier in the week, with official data showing U.S. crude oil inventories to have declined more than anticipated, although production continued to remain firm.

The EIA said U.S. crude oil inventories dropped 2.8 million barrels in the week ended May 22, while analysts expected a decline of 1.8 million barrels. This is the fourth straight week of decline for crude oil inventories.

Meanwhile, industry research group Baker Hughes reported the number of rigs actively drilling for oil in the U.S. dropped by 13 to 659 rigs as on May 29. This is for the 25th week rig count has fallen.

Oil prices have been hovering around $60 a barrel, capped by surging global inventories and renewed strength of the U.S. dollar. OPEC is expected to formulate a policy response to the surging inventories at its June 5 meeting in Vienna.

Tensions in the Middle East, particularly surrounding the conflict in Yemen and ISIS gains in Iraq, have kept crude oil prices afloat.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, soared $2.62 or 4.5 percent, to settle at $60.30 a barrel on the New York Mercantile Exchange Friday.

Crude prices for July delivery scaled a high of $60.70 a barrel intraday and a low of $57.72.

On Thursday, crude oil for July delivery dropped $0.17 or 0.3 percent, to settle at $57.68 a barrel, as the dollar weakened and the official crude oil weekly inventory report from the Energy Information Administration showing a more-than-expected drop.

On the economic front, economic activity in the U.S. contracted for the first time in a year in the first quarter of 2015, revised data from the Commerce Department showed Friday. The U.S. gross domestic product fell by 0.7 percent in the first quarter compared to the previously reported 0.2 percent uptick. The drop came on the heels of a 2.2 percent increase in the fourth quarter. The revised decrease in first-quarter GDP was still slightly smaller than the 0.8 percent drop expected by economists.

Business activity in the Chicago area unexpectedly contracted in May, a report from MNI Indicators showed Friday. The Chicago business barometer tumbled to 46.2 in May from 52.3 in April, with a reading below 50 indicating a contraction in regional business activity. Economists expected the index to edge up to a reading of 53.1.

Consumer sentiment in the U.S. deteriorated less than previously estimated in May, a report from the University of Michigan revealed Friday. The consumer sentiment index for May was upwardly revised to 90.7 from the previously reported 88.6, although it remained below the April reading of 95.9.

Germany's retail sales increased at a faster-than-expected pace in April, after declining in the previous two months, preliminary figures from the statistical office Destatis showed Friday. Retail sales climbed a seasonally and calendar-adjusted 1.7 percent month-over-month in April, in contrast to a 1.4 percent decline in March. Economists expected a 1.0 percent climb for the month. It was the first increase in three months.

France's household consumption grew less-than-expected in April after a slump in March, amid weaker spending on durables, figures from the statistical office INSEE showed Friday. Household consumption edged up 0.1 percent from March, when it declined 0.7 percent, which was the biggest fall since January 2014. Economists had forecast 0.4 percent growth.

France's producer prices continued to decline in April, figures from the statistical office INSEE showed Friday. Producer prices for French market dropped 2.0 percent year-on-year in April, slightly slower than the 2.2 percent decrease in March.

An index measuring consumer confidence in the United Kingdom decreased in May, after a 12-year high in the previous month, as all five measures contributed negatively to the index, a survey from GfK showed Friday. The index fell 3 points to +1 from +4. Economists expected the index to remain at +4.