Investing.com - Oil prices settled lower for the second session in a row on Friday, ending at its weakest level in about a week as sentiment soured amid indications that supply from OPEC was set to rise, despite the cartel's agreement to curb production.
The U.S. West Texas Intermediate crude September contract sank $1.15, or around 2.5%, to end at $45.77 a barrel by close of trade Friday. It touched its lowest since July 13 at $45.54 earlier in the session.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery slumped $1.24, or 2.5%, to settle at $48.06 a barrel by close of trade, after touching a one-week trough of $47.81 earlier.
Friday's sharp drop erased earlier gains made during the week. WTI posted a nearly 1.7% decline on the week, after earlier being on pace to post a roughly 1.5% weekly gain, while Brent declined 85 cents, or about 1.8%.
Oil sank on Friday after tanker-tracking firm PetroLogistics said crude output from OPEC members was set to rise by 145,000 barrels a day in July from a month earlier.
The increase in oil supply would push production above 33 million barrels per day, due to increased output from Saudi Arabia, the United Arab Emirates and Nigeria.
The news comes ahead of a highly-anticipated meeting of some oil ministers from OPEC and non-OPEC producers in Russia on Monday, who are gathering to discuss compliance with the cartel's deal to cut production.
Market experts say the ministers will likely recommend maintaining the policy of holding back output at current levels, but efforts will be made to bring Nigeria and Libya into the framework due to the recent recovery of their production.
In May, OPEC and some non-OPEC producers extended an agreement to slash 1.8 million barrels per day in supply until March 2018. So far, the agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria.
Meanwhile, in the U.S., weekly figures from energy services company Baker Hughes showed that the number of active rigs drilling for oil declined by 1 to 764 last week, suggesting early signs of moderating domestic production growth.
The count is often seen as proxy for the outlook on domestic production.
Elsewhere on Nymex, gasoline futures for August slumped 4.2 cents, or about 2.7%, to end at $1.563 on Friday. It still closed about 0.2% higher for the week.
August heating oil finished down 2.8 cents, or 1.8%, at $1.515 a gallon, ending about flat for the week.
Natural gas futures for August delivery sank 7.3 cents, or 2.4%, to settle at $2.970 per million British thermal units. It saw a weekly drop of roughly 0.4%.
In the week ahead, traders will await the outcome of Monday's meeting of major crude producers for further clarity on how they will try to bring down inventory levels.
Meanwhile, 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.
Monday, July 24
Ministers from OPEC and other non-OPEC producers will meet in St. Petersburg, Russia to discuss compliance with a pact to cut production.
Tuesday, July 25
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, July 26
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, July 27
The U.S. government is set to produce a weekly report on natural gas supplies in storage.
Friday, July 28
Baker Hughes will release weekly data on the U.S. oil rig count.