Oil edges up but biggest weekly drop in Brent since January

NEW YORK (Reuters) - Crude prices inched up in choppy trading on Friday but Brent notched its largest weekly drop in nearly six months, as strong U.S. jobs data and bargain hunting by investors pitted against seasonally weak consumption of oil.

A pump jack stands idle in Dewitt County, Texas January 13, 2016. REUTERS/Anna Driver

The oil market initially rose about 1 percent or more after the U.S. economy posted the largest job gains in eight months in June and on worries about fresh militant attacks on Nigerian oil infrastructure.

Oversupply concerns, however, resurfaced with data showing the U.S. oil rig count rose by 10 this week as drillers added rigs for a fifth week in six as analysts to predict the near two-year slump in drilling has bottomed and production will start to edge up early next year. [RIG/U]

“Some of the gloom and doom on demand destruction for oil has gone away with the U.S. jobs numbers,” said Phil Flynn, analyst at Chicago-based brokerage Price Futures Group.

Brent crude futures LCOc1 ended the session up 36 cents, or 0.8 percent, at $46.76 per barrel, after trading between $47.23 and $46.15.

U.S. crude's West Texas Intermediate (WTI) futures CLc1 settled up 27 cents at $45.41, compared with an earlier drop to $44.77 and a high of $45.97.

Both benchmarks were down nearly 8 percent for the week - the largest weekly slide for Brent since January and the biggest weekly drop for WTI since February.

Crude futures remain some 75 percent above 12-year lows of $27 for Brent and $26 for WTI hit in the first quarter. But the market has gyrated since hitting above $50 as a glut of refined products replaced worries about crude oversupply that caused a near two-year long tumble earlier.

Futures hit two-month lows on Thursday, with WTI breaking below key support of $45.83 after weekly drawdowns in U.S crude looked inadequate to assuage investor concerns. [EIA/S]

“While we are bullish for next year, we continue to be cautious for the rest of this year,” Societe Generale oil analyst Michael Wittner said.

“For the time being, the path of least resistance for oil prices is lower.”

Additional reporting by Devika Krishna Kumar in New York, Libby George in LONDON and Henning Gloystein in SINGAPORE; Editing by Marguerita Choy