Crude oil futures - weekly outlook: February 23 - 27

Investing.com - West Texas Intermediate oil futures fell sharply on Friday, after data showed that the pace of falling rigs in the U.S. slowed last week, underlining concerns over a glut in supplies.

On the New York Mercantile Exchange, crude oil for delivery in April tumbled $1.02, or 1.97%, on Friday to end the week at $50.81 a barrel.

Industry research group Baker Hughes (NYSE:BHI) said Friday that the number of rigs drilling for oil in the U.S. fell by just 37 in the past week, the smallest weekly drop this year and compared to a decline of 84 rigs in the preceding week.

The number of rigs drilling for oil in the U.S. totaled 1,019 last week, the lowest since August 2011. The number of oil rigs has declined in 16 of the last 19 weeks since hitting an all-time high of 1,609 in mid-October.

A day earlier, Nymex oil retreated 99 cents, or 1.87%, to end at $51.83 a barrel, after data showed that oil supplies in the U.S. rose to the highest level on record last week.

Total U.S. crude oil inventories stood at 425.6 million barrels, the most in at least 80 years, indicating that cheap prices have yet to affect output.

For the week, New York-traded oil futures sank $2.69, or 5.33%, the first weekly loss in four weeks.

Elsewhere, on the ICE Futures Exchange in London, Brent for April delivery eased up 1 cent, or 0.02%, on Friday to settle the week at $60.22 a barrel by close of trade.

The April Brent contract declined $1.27, or 2.11%, on the week, halting three straight weeks of gains.

Despite the weekly loss, London-traded Brent prices are up more than 11% in February as some investors bet that a bottom had been reached after a seven-month long rout.

However, prices are still down approximately 47% since June, when futures climbed near $116.

The spread between the Brent and the WTI crude contracts stood at $9.41 a barrel by close of trade on Friday, compared to $8.74 in the preceding week.

Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

Meanwhile, market sentiment received a boost after euro zone finance ministers agreed on a deal to extend Greece’s €240 billion bailout by four months late on Friday.

Athens has until Monday to present a list of reforms to be approved by the country’s creditors in order to secure the extension, which will give it more time to reach a lasting agreement with its creditors.

Greece faces the risk of default and exit from the single currency region if the country does not obtain an extension beyond the February 28 deadline.

In the week ahead, traders will be watching Monday’s deadline on Greece's financial rescue package.

Market players will also be eyeing Tuesday’s testimony by Federal Reserve Chair Janet Yellen to the Senate Banking Committee will be closely watched for any indication on when U.S. interest rates may start to rise.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, February 23

Markets in China are to remain closed for a national holiday.

In Germany, the Ifo research group is to publish its report on business climate.

Later Monday, the U.S. is to publish a report on existing home sales.

Tuesday, February 24

Markets in China are to remain closed for a national holiday.

The U.S. is to produce a private sector report on consumer confidence. Meanwhile, Fed Chair Janet Yellen is to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington.

Wednesday, February 25

China is to release the preliminary reading of the HSBC manufacturing index.

The U.S. is scheduled to produce weekly oil supply data. The country will also release a report on new home sales.

Thursday, February 26

The U.S. is also to release data on initial jobless claims, consumer price inflation and durable goods orders.

Friday, February 27

The U.S. is to round up the week with revised data on fourth quarter growth, as well as reports on pending home sales, business activity in the Chicago region and consumer sentiment.