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US crude oil production drops in February, oil demand rises

US officials are in talks to save First Republic Bank


Oil prices rose more than 2% on Friday after energy firms posted earnings and US data showed crude production fell as fuel demand rose.

On the last day of the front month, Brent futures for June delivery rose $1.17, or 1.5%, to $79.54 a barrel, while the more actively traded July contract rose 2.7% to $80.33.

West Texas Intermediate (WTI) crude rose $2.02, or 2.7%, to settle at $76.78.

Crude oil futures, which were mixed this month, fell this week. Despite daily gains, Brent and WTI fell for the second week in a row, and Brent fell for the fourth month in a row as disappointing US economic data and uncertainty over interest rates weighed on the demand outlook.

The market was down for most of the week amid an impending recession and concerns about the expansion of the First Republic and the banking crisis. However, headlines were made today showing that a solution to the First Republic problem could be found. There are data pointing to an increase in oil demand and a decrease in production.

US officials are coordinating talks to bail out First Republic Bank, as private sector efforts led by the bank’s advisers have yet to reach an agreement, sources say.

Sources say the U.S. Federal Deposit Insurance Corp (FDIC), the Treasury Department, and the Federal Reserve are among government bodies that have begun holding meetings with financial companies to find a solution to the First Republic.

U.S. crude oil production fell to 12.5 million barrels per day in February, the lowest level since December. Fuel demand rose to nearly 20 million barrels, its highest level since November, according to the Energy Information Administration (EIA).

This week’s EIA data showed U.S. crude and gasoline stockpiles fell more than expected last week as demand for motor fuel surged ahead of the summer’s busiest driving season.

Energy services company Baker Hughes Co said the number of oil rigs in the U.S. was unchanged this week at 591 but slashed its fifth monthly decline in April by one notch.

Supporting the dated Brent benchmark, five North Sea crude supplies will average around 607,000 bpd in June compared to 696,000 bpd in May, a 13% drop as loading schedules show.

In recent weeks and months, crude oil prices have continued to fall amid concerns that interest rate hikes could dampen demand.

Brent is down about 3% this week after falling about 5% last week, while WTI is down about 1% this week after losing about 6% last week.

On a monthly basis, Brent fell less than 1% in April, while WTI gained about 1%. This was the first monthly increase in WTI prices in six months.

U.S. consumer spending was unchanged in March, but persistent strength in underlying inflation pressures could cause the Fed to raise rates again next week to slow inflation.