Investing.com - A trio of escalating U.S.-China trade tensions, worries over increasing U.S. production levels and ongoing efforts by major global crude producers to reduce a supply glut will likely be the main drivers of sentiment in the oil market in the week ahead.
Crude oil prices settled at their lowest in two weeks on Friday, as investors fled riskier assets amid fears that deteriorating trade relations between the world's two largest economies could deal a blow to global growth.
Sentiment took another hit after General Electric (NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday that the number of oil drilling rigs rose by 10 to 808 last week.
That was the highest number since March 2015, underscoring worries about rising U.S. output.
New York-traded West Texas Intermediate crude futures sank $1.48, or roughly 2.3%, on Friday to end at $62.06 a barrel by close of trade. The U.S. benchmark touched its lowest since March 19 earlier in the day.
Meanwhile, London-traded Brent crude futures, the benchmark for oil prices outside the U.S., tumbled $1.22, or nearly 1.8%, to settle at $67.11 a barrel.
For the week, WTI lost about 4.4%, its biggest such decline since the week ended Feb. 9, while Brent saw a weekly fall of 4.5%, its biggest since the week ended March 2.
In the week ahead, oil traders will await fresh data on U.S. commercial crude inventories on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
Market players will also focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency on Thursday and Friday to assess global oil supply and demand levels.
Comments from global oil producers for additional signals on whether they plan to extend their current production-cut agreement into next year will also remain on the forefront.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018.
But their efforts have been somewhat stifled by rising non-OPEC output, led by U.S. shale producers.
Domestic oil production - driven by shale extraction - rose to an all-time high of 10.46 million bpd last week, the Energy Information Administration (EIA) said, staying above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer.
Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.
Ahead of the coming week, Investing.com has compiled a list of the main events likely to affect the oil market.
Tuesday
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday
The U.S. Energy Information Administration will release its weekly report on oil and gasoline stockpiles.
Thursday
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
Later on, the U.S. government will publish a weekly report on natural gas supplies in storage.
Friday
The International Energy Agency will release its monthly report on global oil supply and demand.
Later in the day, Baker Hughes will release weekly data on the U.S. oil rig count.