WTI crude climbed $1.62 to $48.71 on Friday
Oil was a major mover on Friday in a rally that erased the weekly decline. It was also the largest one-day rally since November 30, when OPEC first announced production curbs.
Here are five reasons for the gain:
1) The power grab continues in Venezuela
Venezuela's pro-government constitutional assembly said it's taking over powers of opposition-led congress. The continued turmoil raises the odds of a disruption in production or some kind of action from the United States. The jump in crude prices came soon after the Venezuela headlines hit.
2) Drop in drilling rigs
Shale drillers are starting to adjust to prices below $50. After months of a relentless climbs in drilling rigs, the number fell by 5 rigs this week in the second decline in three weeks.
3) Better signs on demand
Non-US demand for physical crude is outstripping the regular seasonal patters, according to a Bloomberg report. The backwardation in the crude market, especially Brent, is a good sign (depending on who you ask).
4) A refinery fire
A Royal Dutch Shell refinery in Deer Park, Texas caught fire and will need to reduce output for at least a week to repair the damage.
5) Better risk appetite
Some of the strength is based on the better mood in broader markets after Bannon's departure.
