Investing.com - Oil futures retreated from three-and-a-half month highs on Friday after the U.S oil rig count rose the first time since December, but prices still posted weekly gains amid growing hopes major oil producers will work together to cap output.
On the New York Mercantile Exchange, crude oil for delivery in April surged to an intraday peak of $41.20 a barrel, the most since December 4, before turning lower to close at $39.44, down 76 cents, or 1.89%.
The U.S. benchmark reversed gain in late trade after oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. increased by one last week to 387, ending three straight months of weekly declines.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
Despite Friday’s losses, New York-traded oil futures jumped $1.27, or 2.44%, on the week, the fifth straight weekly rise. Since falling to 13-year lows at $26.05 on February 11, U.S. crude futures have rebounded by approximately 40% as a decline in U.S. shale production boosted sentiment.
However, analysts warned that market conditions remained weak due to an ongoing glut. U.S. crude stockpiles currently stand at all-time highs above 520 million barrels.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery shed 34 cents, or 0.82%, on Friday to close the week at $41.20 a barrel, after climbing to a daily high of $42.54, a level not seen since December 7.
On the week, London-traded Brent futures rose 95 cents, or 2.01%, the fourth consecutive weekly gain, as continued hopes major oil producers will discuss a potential output freeze lifted prices.
According to Qatari oil minister Mohammed Bin Saleh Al-Sada, producers from within and outside OPEC will meet in Doha on April 17 to discuss plans for a freeze in output.
The initiative was supported by around 20 OPEC and non-OPEC producers, accounting for about 73% of global oil production, according to Venezuela’s Oil Minister.
Brent futures are up by roughly 40%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $1.76, compared to a gap of $1.34 by close of trade on Thursday.
In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.
Developments surrounding a potential deal between OPEC and non-OPEC producers to cap output will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 21
The U.S. is to release data on existing home sales.
Tuesday, March 22
The euro zone is to release survey data on manufacturing and service sector activity. Germany and France are also to release individual reports.
Meanwhile, the Ifo research institute and the ZEW Institute will produce individual reports on March German business sentiment.
Later in the day, the American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, March 23
The U.S. is to release a report on new home sales, while the U.S. Energy Information Administration is to release its weekly report on oil supplies.
Thursday, March 24
The U.S. is to release reports on durable goods orders and initial jobless claims.
Friday, March 25
The U.S. is to round up the week with a final reading on U.S. fourth quarter gross domestic product, while Baker Hughes will release weekly data on the U.S. oil rig count.