Crude oil prices and energy commodity-related exchange traded funds surged Friday as drillers aim to proceed more cautiously in light of the ongoing pressure in the oil market.
The United States Oil Fund (NYSEArca: USO), which tracks West Texas Intermediate crude oil futures, jumped 3.1% and the United States Brent Oil Fund (NYSEArca: BNO), which tracks Brent crude oil futures,increased 3.4% Friday while WTI crude oil futures gained 2.9% to $48.3 per barrel and Brent crude was 3.3% higher to $52.7 per barrel.
Oil price strengthened after Baker Hughes data revealed the number of active U.S. rigs drilling for oil fell by 5 to 763 rigs this week, MarketWatch reports. The total number of active U.S. rigs, which includes both oil and natural gas rigs, also dipped by 3 to 946.
Furthermore, Canada also lost 6 oil rigs this week with the number of gas rigs holding steady, Oil Price reports.
Looking ahead, market participants don’t expect oil prices to make much headway. For instance, Citi’s commodities research team has tempered its outlook for the energy market, projecting price to range between $40 to $55 per barrel from 2018 to 2020, CNBC reports.
Citi also sees more room for significant price volatility, pointing to a number of disrupting factors that have on markets in recent years. If recently restored production in places like Nigeria and Libya falls again, prices could spike upward to $70 per barrel.