U.S. oil prices extended gains Friday, with prices of crude oil on the West Texas Intermediate rising 1.08% to $45.09 a barrel. But data showing rising domestic stockpiles, as well as record shale production, have kept markets in-and-around the lowest levels of the year.
The American Petroleum Institute said Thursday that U.S. crude stockpiles grew by a bigger-than-expected 6.9 million barrels to just under 450 million, a figure that, if confirmed later today by the Energy Information Administration, will likely pressure prices in the last days of a brutal quarter for global crude trading.
Oil prices have also been influenced, in much the same way as global stocks, by rising option market volatility. The CBOE Group's crude oil volatility gauge, the OVX, rose to a one-month high of 57.16 yesterday, tracking the broader spike in the Group's better-know equity gauge, the VIX, which has risen around 47% over the same time period.
"If you want a depiction of the "selloff tracker" so to speak, look at oil," TheStreet's founder, Jim Cramer, wrote on RealMoney this week. "It's been a pretty decent harbinger at times of world growth provided that supply stays relatively the same."
"Now I think it is reflecting weaker demand and higher production," he added. "What matters, though, is that the algos have been set to this damned commodity the whole way down and until oil really does bottom those infernal machines won't turn off."
Brent crude contracts for February delivery, the global benchmark, were marked 13 cents lower from their Thursday close in New York and changing hands at $52.03 per barrel in early European trading, marking a decline of more than 39.2% from the October 3 peak of $86.74 per barrel.
WTI contracts for the same month, which are more tightly liked to U.S gas prices, were seen 32 cents higher at $44.88 per barrel, around 40% down from its early October peak.
The EIA said earlier this month that production from the country's seven biggest shale areas, including the Permian Basin, is likely to top a record 8 million barrels per day this year before rising to around 8.1 million in early 2019. That's likely to add to overall U.S. output, which hit a record 11.7 million barrels per day in the week ending December 7.