Investing.com - Oil futures settled at the lowest level in more than three weeks on Friday, with prices suffering their largest weekly loss in a month amid growing concern over rising shale production in the U.S.
The U.S. West Texas Intermediate crude July contract fell 70 cents, or around 1.5%, to end at $47.66 a barrel by close of trade Friday. It touched its lowest since May 10 at $46.74 earlier in the session.
The U.S. benchmark lost $2.14, or about 4.3%, on the week, the largest weekly decline since the week ended May 5.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery declined 68 cents to settle at $49.95 a barrel by close of trade, after hitting a daily trough of $48.95, a level not seen since May 10.
For the week, London-traded Brent futures recorded a loss of $2.20, or roughly 4.2%.
Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand pressured crude prices.
Data from energy services company Baker Hughes showed on Friday that U.S. drillers last week added rigs for the 20th week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 11 to 733, extending a year-long drilling recovery to the highest level since April 2015.
President Donald Trump’s controversial decision to withdraw from the 2015 Paris climate agreement on Thursday sparked additional concerns that U.S. oil production could expand rapidly in the absence of a stringent focus on curbing the use of fossil fuels.
The Paris Agreement laid out a framework for countries to adopt clean energy and phase out fossil fuels such as oil, coal and natural gas.
The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.
Last week OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018. However, the news disappointed investors who had hoped for larger cuts.
Saudi Energy Minister Khalid al-Falih said further oil output cuts could be needed in the future but that OPEC and other leading producers would assess the market situation in July, Russia's TASS news agency reported on Saturday.
So far, the production-cut 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, and a relentless increase in U.S. shale oil output.
Elsewhere on Nymex, gasoline futures for July lost 2.4 cents, or about 1.5% to end at $1.577 on Friday. It closed down around 4% for the week.
July heating oil slumped 1.6 cents to finish at $1.484 a gallon. For the week, the fuel declined roughly 5%.
Natural gas futures for July delivery dipped 0.9 cents to settle at $2.999 per million British thermal units, ending under $3 for the first time since mid-March. For the week, it dropped about 7%.
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, June 6
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, June 7
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, June 8
The U.S. government is set to produce a weekly report on natural gas supplies in storage.
Friday, June 9
Baker Hughes will release weekly data on the U.S. oil rig count.