Investing.com - Oil futures finished higher on Friday, logging their first weekly gain in more than a month amid optimism that OPEC will agree to production cuts at a meeting scheduled for the end of the month.
On the ICE Futures Exchange in London, Brent oil for January delivery tacked on 37 cents, or 0.8%, to settle at $46.86 a barrel by close of trade Friday. It rallied to $47.62 the day before, the highest since November 2.
For the week, London-traded Brent futures logged a gain of $2.11, or 4.5%, after posting losses in each of the past four weeks.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in December inched up 27 cents, or 0.59%, to end the week at $45.69 a barrel. The contract touched $46.58 on Thursday, a level not seen since November 1.
New York-traded oil futures rose $2.28, or 5%, on the week, after three straight weekly declines. The December contract expires at the end of Monday’s session.
OPEC is moving closer toward finalizing its first deal since 2008 to limit oil output, with most members prepared to offer Iran significant flexibility on production volumes, ministers and sources said on Friday.
Several OPEC oil ministers including Saudi Arabia's Khalid al-Falih met in Doha on the sidelines of a gas forum Friday. Iranian officials attended the gathering although minister Bijan Zanganeh did not come.
At the meeting, OPEC member countries proposed Iran cap its oil output at 3.92 million barrels per day (bpd), according to a source familiar with the proposal.
Iran has previously said it would accept a freeze at between 4.0 and 4.2 million bpd.
The oil group reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September. However, OPEC said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30.
If OPEC reaches a deal at the end of the month, it may also draw support from non-OPEC members including Russia, which promised to cooperate but so far has refrained from any firm commitment.
Russian Energy Minister Alexander Novak participated in Friday's meeting and said he thought OPEC was moving closer to a deal. If an agreement were reached, Russia was prepared to join and cap output for six months or longer, Novak said.
Oil's gains were capped after oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 19 to 471, marking the 11th increase in the last 12 weeks.
Prices were also weighed by a broadly stronger U.S. dollar, which climbed to a 14-year high against a basket of other major currencies, amid a rally driven by the U.S. presidential election and expectations that the Federal Reserve will raise interest rates next month.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.
In the week ahead, trade volumes are expected to remain light around Thursday's Thanksgiving holiday and Friday's shortened trading session.
Market participants 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.
Oil traders will also continue to pay close attention to comments from global oil producers to gauge their readiness on freezing or cutting output.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, November 22
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, November 23
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Baker Hughes will release weekly data on the U.S. oil rig count, which is being released two days earlier than usual, because of the Thanksgiving Day holiday.
In addition, the U.S. is to release data on durable goods orders, initial jobless claims, new home sales and a revised report on consumer sentiment, while the Federal Reserve is to publish the minutes of its November meeting.
Thursday, November 24
Financial markets in the U.S. are to remain closed for the Thanksgiving holiday.