Investing.com -- U.S. crude futures rose considerably on Friday, as oil rigs nationwide fell sharply last week providing signals that the wide gulf in the domestic supply-demand balance might be narrowing.
On the New York Mercantile Exchange, WTI crude for November delivery traded in a tight range between $44.00 and $45.80 a barrel, before closing at $45.55, up 0.81 or 1.81% on the day. For the week, Texas Long Sweet futures were virtually flat after opening on Monday just below $45.40 a barrel. Although the price for the front month of WTI future contracts has not reached $50 a barrel since mid-July, the November contract has only fallen by roughly 1% over the last month of trading.
On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $46.94 and $48.50 a barrel, before settling at $48.17, up 0.48 or 1.01% on the session. After opening on Monday around $48.30 a barrel, brent futures fell less than 1% on the week. Meanwhile, the spread between the international and U.S. benchmarks of crude stood at $2.62, below Thursday's level of $2.92 at the close of trading.
On Friday afternoon, oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count that U.S. oil rigs fell by 26 to 614 for the week ending on Sept. 25. It marked the fifth straight weekly decline and the sharpest drop since the week ending on April 24. With last week's decline, the number of rigs throughout the U.S. fell to the lowest total since August, 2010. Nearly a year ago at this time, the U.S. oil rig count peaked at 1,609.
Earlier this week, the U.S. Department of Energy reported that crude inventories nationwide rose by 4.0 million barrels for the week ending on Sept. 25, significantly above analysts' expectations of a 0.5 million draw. It halted a two week streak of draws of at least 1.9 million barrels. At 457.9 million barrels, U.S. crude inventories still remain near its highest level at this time of the year in at least 80 years.
Energy traders have kept a closer eye on a widening supply-demand imbalance since OPEC rattled global markets last November with its decision to keep its production ceiling unchanged above 30 million barrels per day. The tactic spurred an intense battle between Saudi Arabia and the U.S. for market share, pushing supply levels to record highs and sending crude prices crashing.
Elsewhere, a slew of hurricane models forecasted that Hurricane Joaquin will likely stay out at sea, sparing the Eastern coast of the U.S. from any major damage over the weekend. The storm, which battered the Bahamas on Thursday, had the potential to impact crude prices by disrupting a large number of barges carrying refined products.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.70% to an intraday low of 95.30, its lowest level in two weeks. One day earlier, the index reached as high as 96.64, its highest level in a month.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.