Oil markets extend gains after biggest daily climb in six years

SEOUL: Crude oil futures rose on Friday, adding to their biggest one-day rally in over six years the day before, led by recovering equity markets and news of diminished crude supplies.

US crude are on track for their first weekly gains in 11 weeks, ending the longest losing streak since 1986. Brent crude is set for its first weekly gain in two weeks.

Asian shares extended a global rally on Friday after upbeat US economic data calmed sentiment, with Chinese stocks jumping for the second day following a rocky start to the week.

October Brent crude was up 24 cents at $47.80 per barrel as of 0404 GMT. It settled $4.42 higher at $47.56 per barrel in the previous session. US crude was 37 cents higher at $42.93 per barrel, after ending up $3.96 at $42.56 per barrel.

"A short covering rally, led by crude oil pushed commodities higher across the board. Better than expected U.S. GDP numbers was the main spark, although the force majeure on BP's exports from Nigeria extended the gains," ANZ said in a note on Friday.

"The recovery in commodity prices looks fragile with concerns over China's growth still weighing on market activity."

The US economy grew faster than initially thought in the second quarter on solid domestic demand. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate for the April-June period.

Shell's Nigerian unit, Shell Petroleum Development Company (SPDC), declared force majeure on Bonny Light crude oil exports on Thursday after shutting down two key pipelines in the country due to a leak and theft.

BMI Research, part of the Fitch ratings agency, said: "the renewed weakness in Brent is overdone from a fundamental perspective and due to recover into the US$50.00-60.00/bbl range within the coming months...With the next long-term line of support around USD35.00/bbl, we explore the potential catalysts for a move lower in Brent."

China's falling auto sales have been at the forefront of concerns that its economy is slowing much faster than expected, weighing on oil prices.

Venezuela has been contacting other members of the Organization of the Petroleum Exporting Countries (OPEC), pushing for an emergency meeting with Russia to come up with a plan to stop the global oil price rout, the Wall Street Journal reported.