Investing.com - Oil futures finished lower on Friday, logging their first weekly decline in five weeks amid doubts over the implementation of a planned deal by global crude producers to scale back output.
On the New York Mercantile Exchange, crude oil for delivery in February shed 64 cents, or about 1.2%, to end at $52.37 a barrel by close of trade Friday.
For the week, New York-traded oil futures lost $1.62, or around 3%, after posting gains in each of the previous four weeks.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery slumped 56 cents, or 1%, to settle at $55.45 a barrel by close of trade.
London-traded Brent futures logged a loss of $1.37, or approximately 2.4%, on the week.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day.
The deal, if carried out as planned, should reduce global supply by about 2%.
However, some traders remain skeptical that the planned cuts will be as substantial as the market currently expects.
While major oil producers, such as Saudi Arabia and Kuwait, have so far showed signs that they are sticking to their pledge to cut back output, others, such as Libya have ramped up production.
OPEC plans to release its monthly oil report on January 18 and the IEA’s monthly report is due the day after, but both would come just over two weeks after the output cuts officially began.
As a result, markets will have to wait until the January report in mid-February for further evidence that OPEC members are adhering to planned output cuts.
Meanwhile, market players shrugged off a report showing a downtick in U.S. drilling activity last week.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week decreased by 7 to 522. That was the first decline in the oil-rig count in 10 weeks.
Elsewhere on Nymex, gasoline futures for February eased up 0.9 cents, or less than 0.1% to $1.611 a gallon. It ended down about 1.4% for the week.
February heating oil shed 2.4 cents, or 1.4%, to finish at $1.651 a gallon. For the week, the fuel declined around 3%.
Natural gas futures for February delivery settled 3.3 cents, or nearly 1%, higher at $3.419 per million British thermal units. Bucking the trend among other major energy futures, it scored a weekly gain of around 4.1%, following the release of bullish weekly storage data.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to gauge the strength of demand in the world’s largest oil consumer.
The reports come out one day later than usual due to Monday's Martin Luther King Jr. holiday.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Wednesday, January 18
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Thursday, January 19
The International Energy Agency will release its monthly report on global oil supply and demand.
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
The U.S. EIA is also to produce a weekly report on natural gas supplies in storage.
Friday, January 20
Baker Hughes will release weekly data on the U.S. oil rig count.