Oil prices rallied on Friday, after a choppy start, as an agreement for a closer euro zone fiscal union and news of a Chinese fund for US and European investment lifted the euro and equities markets. Brent and US crude futures both posted weekly losses, and sources said skepticism about the latest European Union agreement to tackle their debt crisis limited crude price gains on Friday, along with weak heating oil futures. Low volume trading helped keep oil trading volatile, and oil did not get much of a boost initially from a report showing US consumer sentiment rose in early December to its highest level in six months. All 17 members of the euro zone and six other countries that aspire to join the bloc agreed to negotiate a new deal alongside the EU treaty with a tougher deficit and debt regime to insulate the euro zone against the debt crisis.
“The oil complex proved less enthused about the EU summit agreement than was the case with the stock market,” Jim Ritterbusch, president at Ritterbusch & Associates, said in a note. ICE Brent January crude rose 51 cents to settle at $108.62 a barrel, recovering after dropping $1, but posting a 1.2 per cent weekly loss. US crude futures rose $1.07 to settle at $99.41 a barrel, recovering from a $97.36 intraday low and having lost more than 2 per cent on Thursday. It posted a 1.5 per cent weekly loss. Brent trading volumes were 22 per cent under the 30-day average, and while US crude trading outpaced Brent, volume was 6 per cent below the 30-day average. US heating oil futures closed lower as unseasonably mild weather and rising distillate inventories weighed on prices, while gasoline futures ended higher. Crude oil and refined products stockpiles rose last week, the government reported on Wednesday. In the week to Tuesday, speculators raised their net long positions in US crude oil futures and options position, data from the US Commodity Futures Trading Commission showed on Friday.