Oil heads for weekly gain, shrugs off ample supply

SINGAPORE - Oil prices were little changed on Friday but set to end the week slightly higher, buoyed by a weaker dollar, forecasts of lower U.S. crude output and a pick-up in global demand. US crude is set to rise for a ninth week, which would be the benchmark's longest winning streak since 1983. US crude stockpiles have fallen from record levels, while international oil agencies have cut US production forecasts after low prices hurt shale producers. June West Texas Intermediate futures were down 17 cents at $59.71 a barrel as of 0437 GMT. July Brent crude fell 17 cents to $66.53 a barrel. Front-month Brent is on track for a weekly gain after a 1.6 percent decline last week interrupted its month-long rally. But analysts said prices have outperformed weak oil fundamentals. Supply continues to exceed demand growth, which has been curbed by a lacklustre global economy. "Recent price action across a number of commodities suggests the rally in recent months has largely run its course," ANZ analysts said in a note. The bank noted that WTI has failed to rise above $62 a barrel twice in the past week despite a weaker U.S. dollar. Oil prices also did not react much to rising tensions in the Gulf, after Iranian naval vessels fired shots at a Singapore-flagged tanker in the Gulf on Thursday. In fact there are worries the recent oil price rally may prompt U.S. shale oil producers to ramp up output. "WTI tapered below its key $60 a barrel handle likely on expectation that further rally in prices may allow shale producers to reinstate production," OCBC analysts said. Baker Hughes will be releasing weekly US rig count data later on Friday. The data has become a closely watched indicator to gauge adjustments in US production. - Reuters