Investing.com - West Texas Intermediate oil prices rallied more than 8% on Friday, the biggest one-day gain since June 2012, amid indication that U.S. producers may be pulling back on new production in response to low prices.
On the New York Mercantile Exchange, crude oil for delivery in March surged $3.71, or 8.33%, on Friday to end the week at $48.24 a barrel.
A day earlier, Nymex oil touched $43.58, a level not seen since March 2009, after government data showed U.S. crude supplies rose to the highest level since at least 1982.
For the week, New York-traded oil futures climbed $3.04, or 5.81%. On the month however, prices lost $5.96, or 10.17%.
Oil's gains came after industry research group Baker Hughes said that the number of rigs drilling for oil in the U.S. fell by another 94, or 7%, in the past week to 1,223, the lowest since October 2013.
The number of oil rigs has declined in 13 of the last 16 weeks since hitting an all-time high of 1,609 in mid-October.
Elsewhere, on the ICE Futures Exchange in London, Brent for March delivery soared $3.86, or 7.86%, on Friday to settle at $52.99 a barrel by close of trade. It was the biggest daily advance since April 2009.
The March Brent contract rallied $4.43, or 8.61%, on the week. Brent prices were still down $5.92, or 8.97%, on the month.
The spread between the Brent and the WTI crude contracts stood at $4.75 a barrel by close of trade on Friday, compared to $3.20 in the preceding week.
Oil prices have fallen nearly 60% since June 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, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended at 95.00 by late-Friday, down 0.01% for the day and 0.33% lower on the week, as investors reacted to data showing the U.S. economy grew less than expected in the fourth quarter.
The Commerce Department said in a report that the economy expanded 2.6% in the final three months of 2014, below expectations for a 3.0% gain and slowing sharply from growth of 5.0% in the three months to September.
In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labor market.