Investing.com - Oil prices rallied sharply to end at an eight-week high on Friday, as the prospect of an extension to OPEC-led production cuts into next year helped futures notch their largest weekly advance since July.
Oil's impressive gains defied a slump in global stock markets, which sank in response to worries about a brewing trade war between the U.S. and China.
U.S. West Texas Intermediate WTI crude futures surged $1.58, or 2.4%, to close at $65.88 a barrel, a level not seen since Feb. 2.
Meanwhile, London-traded Brent crude futures, the benchmark for oil prices outside the U.S., jumped $1.54, or roughly 2.2%, to settle at $70.45 a barrel, its highest since Jan. 29.
For the week, WTI crude jumped nearly 5.7%, while Brent soared 6.4%, their biggest weekly gains in eight months.
Sentiment improved after Saudi Energy Minister Khalid al-Falih said OPEC members would need to continue coordinating with Russia and other non-OPEC oil-producing countries on supply curbs in 2019 to reduce global oil inventories.
OPEC, along with some non-OPEC members led by Russia, have been restraining production by 1.8 million barrels per day (bpd) to curb the market of excess supply. The arrangement, which was adopted last winter, expires at the end of 2018.
However, analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.
The number of oil drilling rigs rose by four to 804 last week, General Electric (NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday.
The U.S. rig count, an early indicator of future output, is much higher than a year ago as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.
U.S. oil production, driven by shale extraction, rose to an all-time high of 10.40 million barrels per day (bpd) last week, staying above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer.
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 and how fast output levels will continue to rise.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday
The U.S. government will publish a weekly report on natural gas supplies in storage.
Baker Hughes will release weekly data on the U.S. oil rig count. The data comes out one day earlier than usual due to Friday's Easter holiday.