Investing.com - Oil prices extended their recent rally on Friday to reach the highest level in more than two years amid expectations that major global producers will extend a deal to curb production beyond its current expiry date next March.
Prices received another boost as a sizable weekly drop in active U.S. oil rigs fed expectations for a slowdown in domestic crude output growth.
Oilfield services firm Baker Hughes reported that the number of active U.S. rigs drilling for oil fell by eight to 729 last week. That was the fourth weekly decline in five.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for domestic oil production.
U.S. West Texas Intermediate (WTI) crude futures surged $1.10, or around 2%, to end at $55.64 a barrel by close of trade. It reached its best level since July 2015 at $55.76 earlier in the session.
It ended around 3.2% higher for the week, up a fourth-straight week.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., jumped $1.45, or roughly 2.4%, to settle at $62.07 a barrel. It touched an intraday peak of $62.23, a level not seen since July 2015.
The global benchmark ended the week with an increase of approximately 2.7%, the fourth-straight weekly gain.
Oil prices extended a rally which began in early October, largely driven by hopes that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.
In other energy trading Friday, gasoline futures advanced 2.3 cents, or 1.3%, to end at $1.793 on Friday. It closed up around 1.4% for the week.
Heating oil rose 3.2 cents, or 1.7%, at $1.886 a gallon, ending roughly 1% higher for the week.
Natural gas futures spiked 4.9 cents, or almost 1.7%, to settle at $2.984 per million British thermal units. It traded around 0.7% higher for the week.
In the week ahead, 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.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, November 7
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, November 8
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, November 9
The U.S. government is set to produce a weekly report on natural gas supplies in storage.
Friday, November 10
Baker Hughes will release weekly data on the U.S. oil rig count.