OIL PRICES UP
Light, sweet crude for December delivery rose $1.41, or 2.6%, to $56.55 a barrel on the New York Mercantile Exchange, snapping a three-session losing streak. Brent, the global benchmark, advanced $1.36, or 2.2%, to $62.72 a barrel.
On Thursday, Saudi Arabia's energy minister Khalid al-Falih reiterated the country's commitment to the deal, saying that further production cuts are necessary to continue rebalancing the market.
"This isn't a parsed statement, this is clear-cut and pretty unequivocal, " said John Saucer, vice president of research and analysis at Mobius Risk Group. "It wiped away doubts."
Many traders are anticipating that the Organization of the Petroleum Exporting Countries and other major producers will announce a decision to extend supply cuts past March 2018 after their meeting in Vienna on Nov. 30.
Following the meeting last year, OPEC agreed to reduce its crude output in an effort to rein in the supply glut and boost prices, later bringing in Russia and several other producers outside the cartel. The deal, which was extended in May, is set to expire in March. Russia has also indicated a willingness to lengthen the cuts and is set to participate in the OPEC meeting at the end of the month.
"It's going to be an OPEC-headline type market for the next two weeks here," said Bob Yawger, director of the futures division of Mizuho Securities USA.
Still, some doubts linger over some producers' commitment to the deal. The high level of speculative long positions in the market may also put increased pressure on OPEC to come out of the meeting with an extension agreement, Mr. Yawger said.
"Anything apart from an extension to the end of 2018 is likely to send the oil price into an immediate tailspin," Commerzbank analysts wrote.
Despite Friday's gains, oil prices closed down for the week after five straight weeks of gains. Concerns over increasing output from U.S. shale producers resurfaced this week, raising questions on whether they will continue to flood the market as other countries pull back.
On Wednesday, the U.S. Energy Information Administration said U.S. production rose last week to a record weekly high of 9.645 million barrels, while crude stockpiles climbed by 1.9 million barrels.
That report came a day after the International Energy Agency revised downwards its global oil demand forecasts for this year and next.
Gasoline futures rose 1.8% to $1.7447 a gallon and diesel futures gained 2.3% to $1.9466 a gallon.
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PLATTS - State-run Indian Oil Corp has signed its first US term crude oil deal, buying 6 million barrels, as the Asian buyer steps up efforts to devise an alternative buying strategy amid uncertainty about purchases from Iran because of US sanctions.
PLATTS - Angola's crude oil exports rebounded to a four-month high of 1.63 mil b/d in June even as the OPEC member struggles to arrest declines at some of its ageing deepwater oil fields, finance ministry data showed.
BAKER HUGHES A GE - U.S. Rig Count is up 13 rigs from last week to 1,057, with oil rigs up 10 to 869, gas rigs up 3 to 186, and miscellaneous rigs unchanged at 2. Canada Rig Count is down 14 rigs from last week to 209, with oil rigs down 12 to 140 and gas rigs down 2 to 69.
REUTERS - Front-month Brent crude oil futures LCOc1 were at $71.88 per barrel at 0646 GMT, down 19 cents, or 0.3 percent from their last close. U.S. West Texas Intermediate (WTI) crude futures CLc1 were down by 22 cents, or 0.3 percent, at $66.59 a barrel.