Investing.com - Oil futures ended higher on Friday, as a weaker U.S. dollar lent support to the commodity and amid subsiding fears about the Brexit referendum’s impact on crude demand.
A weaker dollar often leads to higher oil prices because it makes the dollar-denominated commodity cheaper for holders of other currencies.
Meanwhile, concerns over the U.K.’s decision to leave the European Union faded over the course of the week, with many analysts saying that Britain’s economy is too small for an economic slowdown that could cut oil demand growth substantially.
Gains were limited as data showed that the U.S. oil rig count rose for the fourth time over the past five weeks.
On the New York Mercantile Exchange, crude oil for delivery in August advanced 66 cents, or 1.37%, to end at $48.99 a barrel. For the week, New York-traded oil futures rose $1.18, or 2.83%, the first weekly gain in three weeks.
Despite the upbeat performance, gains were limited amid signs of a potential recovery in U.S. drilling activity.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 11 last week to 341, marking the fourth increase in five weeks.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
U.S. crude futures ended the second quarter with a gain of nearly 25%, its strongest three-month period in seven years. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery tacked on 64 cents, or 1.29%, to settle at $50.35 a barrel by close of trade on Friday.
On the week, London-traded Brent futures jumped $1.92, or 4.01%, its best week in more than a month, as buyers returned to the market to take advantage of cheap valuations following the Brexit-related selloff in late June. Prices ended the second quarter with gains of almost 28%.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Wednesday and Thursday for fresh supply-and-demand signals. The reports come out one day later than usual due to the Independence Day holiday in the U.S. on Monday.
Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, July 4
U.S. financial markets will be closed for the Independence Day holiday.
Wednesday, July 6
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Thursday, July 7
The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.
Friday, July 8
Baker Hughes will release weekly data on the U.S. oil rig count.