Crude oil futures drop amid Opec's decision to keep output unchanged

Crude oil futures traded higher on 5 June, but finished lower for the week, amid declining US drilling activity and after oil cartel Opec's decision to continue pumping flat out.

Brent July contract finished $1.28, or 2.06%, higher at $63.31 on Friday.

The global benchmark lost some 3.4% for the week as a whole.

US July contract finished $1.13, or 1.95%, higher at $59.13 a barrel.

WTI lost 1.9% for the week.

Baker Hughes reported that the number of US rigs actively drilling for oil fell by four to 642 rigs as of 5 June, marking the 26th successive weekly decline in rig count.

Earlier on Friday, the 12-member Organization of the Petroleum Exporting Countries (Opec) decided to retain its production levels of 30 million barrels per day (bpd) for the next six months. The Saudi Arabia-led cartel will meet again on 4 December.

Capital Economics said in a 5 June note to clients: "It was no great surprise that Opec left its output target unchanged today. Oil prices even ticked up a little on the news as late speculation of an increase in the target proved unfounded.

"Nonetheless, renewed discussion of a 'fair' price for oil, of $75 or $80 per barrel, should not be taken as an indication of where prices are heading."

Capital Economics said in a separate note: "...Opec's decision to leave its target for oil production unchanged was no surprise, but did underline the prospect of an extended period of ample supply – especially with signs that US output is bottoming out too. Indeed, Brent is now back within a whisker of our end-2015 forecast of $60 per barrel."