Investing.com – Oil prices finished higher on Friday to score their second consecutive weekly gain, amid growing optimism that rebalancing in crude markets are well underway thanks to OPEC-led production cuts.
The commodity was also boosted following news of a drop in Libyan output due to the shutdown of the El Feel oilfield, which produces 70,000 barrels per day (bpd) of crude.
U.S. West Texas Intermediate (WTI) for April delivery tacked on 78 cents, or around 1.2%, to close at $63.55 a barrel, a level not seen since Feb. 7.
Meanwhile, May futures, the benchmark for oil prices outside the U.S., advanced 93 cents, or roughly 1.4%, to settle at $67.04 a barrel, its highest level in more than two weeks.
For the week, WTI crude rose nearly 3%, while Brent added about 3.8%, as both continue to claw back ground lost in a selloff earlier this month.
Sentiment was boosted after Saudi Arabia’s energy minister Khalid al-Falih said it was clear oil markets are rebalancing, and added that he expects inventories to continue to decline in 2018.
The Organization of the Petroleum Exporting Countries (OPEC), along with some non-OPEC members led by Russia, have been restraining production by 1.8 million barrels per day (bpd) to curb the market of excess supply. The arrangement, which was adopted last winter, expires at the end of 2018.
However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies prevented prices from rising much farther.
The number of oil drilling rigs last week, General Electric (NYSE:)’s Baker Hughes energy services firm said in its closely followed report on Friday. The count has risen by 52 oil rigs in the last five weeks, putting the total at a nearly three-year high of 799.
U.S. oil production, driven by shale extraction, held steady at an all-time high of 10.27 million bpd last week, keeping it above Saudi Arabia’s output levels and within reach of Russia, the world’s biggest crude producer.
Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC’s effort to end a supply glut.
Among other energy contracts, April increased 2.8 cents, or around 1.5%, to end at $1.989 a gallon on Friday, with prices tallying a weekly gain of 3.3%.
for April edged up 1.9 cents, or 1%, to $1.972 a gallon, posting a weekly advance of 3.1%.
Meanwhile, slipped 1.9 cents, or 0.7%, to $2.657 per million British thermal units. It still notched a gain of around 2.6% for the week.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on and to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
The U.S. government will publish a weekly report on natural gas supplies in storage.
Baker Hughes will release weekly data on the U.S. oil rig count.