Investing.com - Oil prices settled sharply higher on Friday, jumping about 3% in a surprise rally amid reports of a unit shutdown at one of the largest oil refineries in the U.S., as well as data showing a weekly fall in the number of active domestic oil rigs.
Traders piled into crude contracts after reports surfaced that a unit at Exxon (NYSE:XOM) Mobil’s Baytown, Texas refinery shut down. The 584,000 barrel-a-day plant is the second-largest refinery in the U.S.
The report surfaced ahead of an update from oilfield services firm Baker Hughes Friday morning, showing its weekly count of oil rigs operating in the U.S. last week fell by five rigs to a total of 763.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
Aside from supply and demand, investors also bought up oil contracts amid a broader market rally sparked by Steve Bannon’s departure from the White House.
The U.S. West Texas Intermediate crude September contract surged $1.42, or around 3%, to end at $48.51 a barrel. It slumped to its lowest since July 25 at $46.46 a day earlier.
Despite Friday's rally, New York-traded oil prices ended the week down 31 cents, or nearly 0.6%, its third such loss in a row, thanks to heavy losses suffered mid-week.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery soared $1.69, or about 3.3%, to settle at $52.72 a barrel by close of trade. For the week, the global benchmark rose 62 cents, or roughly 1.2%.
London-traded Brent futures have been buoyed by recent signs that global supplies are tightening.
OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.
Elsewhere on Nymex, gasoline futures for September rose 3.7 cents, or about 2.3%, to end at $1.634 on Friday. It closed around 0.7% higher for the week.
September heating oil finished up 3.8 cents, or 2.4%, at $1.620 a gallon, ending roughly 0.9% lower for the week.
Natural gas futures for September delivery shed 3.6 cents, or 1.2%, to settle at $2.893 per million British thermal units. It saw a weekly loss of nearly 3%.
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.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, August 22
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, August 23
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, August 24
The U.S. government is set to produce a weekly report on natural gas supplies in storage.
Friday, August 25
Baker Hughes will release weekly data on the U.S. oil rig count.