Oil prices settled higher for the fifth session in a row on Friday to log its biggest weekly gain this year as investors cheered signs that rising demand will offset excess supplies in the second half of the year.
The U.S. West Texas Intermediate crude September contract tacked on 67 cents, or around 1.4%, to end at $49.71 a barrel by close of trade Friday. It touched its highest since May 30 at $49.81 earlier in the session.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery rallied $1.03, or 2%, to settle at $52.52 a barrel by close of trade, after touching a two-month peak of $52.70 earlier.
For the week, WTI gained $3.94, or about 8.5%, while Brent rose $4.46, or roughly 9.3%, the largest such jump since early December, as fresh pledges from Saudi Arabia and Nigeria to respectively pull back on exports and output boosted sentiment.
Data showing a fourth consecutive week of declines in U.S. crude inventories and signs of a possible slowdown in U.S. shale production further added to optimism that the oil market was beginning to rebalance.
Weekly figures from energy services company Baker Hughes showed that the number of active rigs drilling for oil edged higher by two to 766 last week, suggesting early signs of moderating domestic production growth.
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, as well as a relentless increase in U.S. shale output.
Elsewhere on Nymex, gasoline futures for August climbed 3.1 cents, or about 1.9%, to end at $1.676 on Friday. It closed around 7.2% higher for the week.
August heating oil finished up 3.6 cents, or 2.3%, at $1.639 a gallon, ending roughly 8.2% higher for the week.
Natural gas futures for September delivery sank 2.6 cents, or 0.9%, to settle at $2.941 per million British thermal units. It saw a weekly drop of nearly 1%.
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.
Meanwhile, traders will also continue to pay close attention to comments from global oil producers for evidence that they are complying with their agreement to reduce output this year.