Oil trades near $50 making first weekly gain in 8 weeks

Oil traded near $50 after capping its first weekly gain in two months as investors weigh rising OPEC output against speculation supply from outside the group will slow.

Futures were little changed in London and New York. Iraq is pumping at a record pace of 4 MMbopd. Non-OPEC nations will boost output this year at a weaker rate than previously forecast, according to the International Energy Agency.

Crude slumped almost 60 percent since June 2014 as the US pumped oil at the fastest rate in more than three decades while OPEC resisted calls to cut supply. US producers idled a record number of drill rigs during the past six weeks, according to data from Baker Hughes.

Brent for March settlement was up 12 cents at $50.29/bbl on the London-based ICE Futures Europe exchange. It gained 3.9 percent to $50.17 on January 16. The European benchmark crude was at a premium of $1.21 to WTI for the same month.

Iraq plans to increase crude exports to 3.3 MMbopd this year, including sales from the semi-autonomous Kurdish region in the north. The OPEC producer pumped 3.35 MMbopd in December.

In Saudi Arabia, OPEC’s biggest producer, oil exports rose to a seven-month high in November when it led OPEC to keep the group’s production quota unchanged. Overseas shipments climbed to 7.3 MMbopd from 6.9 MMbopd in October, according to data on the website of the Joint Organisations Data Initiative.

OPEC, which supplies about 40 percent of the world’s crude, maintained its collective quota of 30 MMbopd at a meeting in November. The 12-member group pumped 30.2 MMbopd in December.

US output rose to 9.19 MMbopd, the fastest pace in weekly records dating back to January 1983, data from the Energy Information Administration show.

The number of operating oil rigs in the US has declined by 209 since December 5, the steepest six-week drop since Baker Hughes began tracking the data in July 1987. The count was down 55 in the week ended January 16 to 1,366.

The IEA lowered its non-OPEC supply growth estimate by 350,000 bpd, the first reduction since the 2015 forecast was introduced in July. Half the cut is from Colombian output while effects on US production are so far “marginal,” the Paris-based group, which advises 29 nations on energy policy, said in its monthly market report.