Oil prices heading for fifth-straight weekly gains

World oil prices recovered further this week, extending a recent fightback thanks to a falling dollar and agreement by producers to meet next month to discuss a global supply glut.

Crude futures rallied for a third day running Friday before giving way to some profit-taking, while traders brushed aside news of a rocket attack by jihadists on a gas plant in OPEC energy producer Algeria.

But they had fallen on Monday and Tuesday on fading hopes of a meeting between producers and renewed concerns over slowing growth in China, the world’s second biggest economy, dealers said.

“Oil prices are on the verge of closing higher for the fifth straight week,” said Fawad Razaqzada, analyst at City Index trading group.

Around 1715 GMT, US benchmark West Texas Intermediate (WTI) for delivery in April was down 53 cents to $39.67 a barrel.

Brent North Sea crude for May delivery dropped 40 cents to $41.14 a barrel compared with Thursday’s close.

Both contracts were however up over the week, while WTI had advanced 4.5 percent Thursday, closing above $40 for the first time since the start of December.

With confidence growing that the world’s biggest crude producers will hammer out a deal to curb output, investors have piled back into the commodity in recent weeks after they toyed with 13-year lows last month.

Qatar’s energy minister, Mohammed al-Sada, confirmed this week that exporters from within and outside the OPEC cartel will meet April 17 in Doha, stoking hopes of an agreement to ease a global supply glut.

“Crude oil has found support from growing optimism that key OPEC and non-OPEC producers will agree a deal to freeze production,” Inenco energy consultants said in a note to clients published Friday.

Buying in recent days has been fuelled also by the Federal Reserve, which on Wednesday halved its forecast for US interest rate hikes this year.

The outlook, citing a global slowdown and market turmoil, sent the dollar sliding, which in turn makes oil cheaper for holders of rival currencies.

“Commodities have benefited in the past week from a continued improvement in investor sentiment, helped by a relatively dovish statement from the US central bank which weakened the dollar,” said Capital Economists analyst Caroline Bain.

– Tighter US supplies –

Oil prices have plummeted by more than 60 percent since mid-2014 because of oversupply and weaker demand growth.

The world is awash with oil as OPEC members seek to maintain market share faced with competition from producers extracting oil from North American shale rock.

“The early stages of global oil rebalancing, which requires US crude oil production to decline significantly, have begun and will continue as long as WTI prices remain sufficiently low that US shale oil producers are forced to continue reducing output,” French bank Societe Generale said this week.

Official data Wednesday revealed that US stockpiles of commercial crude grew by 1.3 million barrels last week, far lower than the 3.2-million build expected by markets.

On Friday meanwhile, jihadists launched a rocket attack on an Algerian gas plant jointly operated by foreign companies, three years after a deadly hostage crisis at another facility in the Sahara desert.

There were no reports of casualties in Friday’s attack, companies and workers at the site said.

Algeria is one of the world’s largest exporters of natural gas, with revenue from fossil fuels accounting for 95 percent of its exports.