Investing.com - Oil futures snapped a four-day losing streak on Friday, amid Russian comments favoring a production freeze, but still suffered a hefty decline for the week amid ongoing concerns over a global supply glut.
Traders also assessed the likelihood of an interest rate hike at this month's Federal Reserve meeting, following weaker than expected nonfarm payrolls data.
On the ICE Futures Exchange in London, Brent oil for November delivery jumped $1.38, or 3.04%, on Friday to settle at $46.83 a barrel by close of trade. On Thursday, prices tumbled to $45.32, a level not seen since August 11.
For the week, London-traded Brent futures sank $3.09, or 6.2%, the second weekly loss in a row.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in October ended Friday's session at $44.44 a barrel, up $1.28, or 2.97%, on the day.
Futures slumped to a three-week low of $43.00 on Thursday after weekly supply data showed a surprisingly large build in U.S. crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline.
Despite Friday's gains, New York-traded oil futures dropped $3.20, or 6.7%, for the week, the worst weekly loss since early July.
Oil prices strengthened on Friday after Russian President Vladimir Putin said in an interview with Bloomberg that an agreement between major oil exporters to freeze output would be the right decision to support the market.
His comments followed similar rhetoric from Saudi Arabia's foreign minister Adel al-Jubeir, who reportedly said on Thursday that some sort of a production agreement could be made between OPEC and non-OPEC producers at this month's meeting.
OPEC members are set to discuss a potential production cap at an informal meeting on the sidelines of an energy conference in Algeria between September 26-28.
Despite the supportive remarks, chances that the upcoming meeting in late September would yield any action to reduce the global glut appeared minimal, according to market experts. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.
Meanwhile, market players continued to focus on U.S. drilling prospects, amid indications of a recent recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 1 to 407, marking the ninth increase in 10 weeks.
Some analysts have warned that the recent rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, underlining concerns over a global supply glut.
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 Monday's Labor Day holiday.
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.
Wednesday, September 7
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Thursday, September 8
The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.
Friday, September 9
Baker Hughes will release weekly data on the U.S. oil rig count.