Investing.com – Crude futures settled higher on Friday, recovering from a five-month slump, after Saudi Arabia said its supports the idea of extending the supply-cut agreement beyond June while the number of active U.S. drilling rigs rose for an sixteenth straight week.
On the New York Mercantile Exchange crude futures for June delivery added 70 cents to settle at $46.22 a barrel, while on London's Intercontinental Exchange, Brent gained 81 cents to trade at $49.17 a barrel.
Oil prices bounced back from five-month lows sustained in the previous session, after Saudi Arabia’s OPEC Governor Adeeb Al-Aama said OPEC and non-OPEC nations were close to agreeing a deal to extend the supply-cut agreement for an additional six-months.
"Based on today's data, there's a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet," the Saudi official said.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd).
OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for an additional six-months to the end of the year.
Gains in oil futures were capped as concerns over rising U.S. oil output persisted, after oilfield services firm Baker Hughes reported its weekly U.S. rig count rose by 6 to 703. It was the sixteenth straight weekly increase.
Crude futures settled 6.3% lower for the week, wiping out the most of the gains achieved since OPEC and other producers agreed a deal to rein in the glut in supply, which has pressured prices over the last three years.