Investing.com - Oil futures settled at a four-week high on Friday, with prices scoring a weekly gain of more than 5% amid optimism that key producers will extend output cuts beyond an agreed-on June deadline when they meet later this month.
The U.S. West Texas Intermediate crude June contract tacked on 98 cents, or around 2%, to end at $50.33 a barrel by close of trade Friday, the first time it has settled above $50 in more than four weeks. It touched the highest since April 21 at $50.53 earlier in the session.
The U.S. benchmark rose $2.49, or about 5%, on the week, the second straight weekly advance.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery added $1.10 to settle at $53.61 a barrel by close of trade, after hitting a daily peak of $53.82, a level not seen since April 19.
For the week, London-traded Brent futures recorded a gain of $2.77, or roughly 5.2%.
Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on May 25 to decide whether to extend their current production agreement beyond a June 30-deadline.
In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.
Most market analysts expect the oil cartel to extend output cuts for a further nine months until March 2018, instead of six months as previously expected.
There is also talk that OPEC is looking at the option of deepening current production cuts, but it is not clear whether there would be support for that.
So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya, and a relentless increase in U.S. shale oil output.
Data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 18th week in a row, the second-longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 8 to 720, extending an 11-month drilling recovery to the highest level since April 2015.
Elsewhere on Nymex, gasoline futures for June gained 4.6 cents, or about 2.9% to end at a four-week high of $1.652 on Friday. It closed up around 4.8% for the week amid easing concern over lackluster demand.
June heating oil added 3.7 cents to finish at $1.582 a gallon. For the week, the fuel tacked on roughly 6%.
Natural gas futures for June delivery rose 7.4 cents to settle at $3.256 per million British thermal units, up 2.3% for the session but about 4.9% lower for the week.
In the week ahead, market participants will focus on the Organization of Petroleum Exporting Countries highly-anticipated meeting on Thursday to see whether major producers plan to extend their current production-cut agreement.
Meanwhile, oil traders will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, May 23
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, May 24
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, May 25
Major global oil producers are due to meet in Vienna in order to decide on extending their current output-cut deal.
The U.S. government is to produce a weekly report on natural gas supplies in storage.
Friday, May 26
Baker Hughes will release weekly data on the U.S. oil rig count.