Oil tops $60 for first time in 2015; oversupply persists

NEW YORK (Reuters) - Oil closed up for a second straight week on Friday after another drop in the U.S.
rig count, and Brent crude hit a 2015 high above $60 a barrel, but market skeptics cautioned the rally
could fade because supplies keep coming.
Many traders and analysts believe there is a global oversupply of nearly two million barrels per day of
crude oil.They say little has changed fundamentally to explain the price rebound of the past two weeks.
The number of oil drilling rigs in the United States fell this week to its lowest since August 2011, data
showed on Friday. But the market's reaction was relatively tepid compared with the past two weeks when
prices spiked on declining rig counts.
"I think people are starting to understand to a certain point that, even if rig counts go down, it's not going
to affect production in the short term. It's going to take a few months for that to happen," said Tariq
Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York.
U.S. crude inventories have swelled to record highs of nearly 418 million barrels, government data showed
last week.
Brent settled the session up $2.24, or nearly 4 percent, at $61.52 a barrel. It rose a 6 percent on the week
and 15 percent month-to-date. Brent's gains increased this week after its front-month contract switched
on Thursday at a premium.
U.S. crude CLc1 finished $1.57, or 3 percent, higher at $52.78 a barrel.
Oil prices more than halved between June and January as a global glut pushed Brent from a summer peak
above $115 to a near six-year low under $46.
"Naturally, when prices fall that much within that short a time, you're likely to have a severe rebound as
well, though speculators are possibly adding more fuel on the way up now," said Phil Flynn, an analyst at
the Price Futures Group in Chicago.
Some traders attributed Friday's strength to an unexpected acceleration in euro zone economic growth in
the final quarter of 2014. The bloc's largest member, Germany, grew at more than twice the expected rate.
Market bulls were also betting that cuts in exploration budgets will help mop up some of the excess
supply.