Investing.com - Oil futures finished higher on Friday, logging a weekly gain, as traders cheered signs that global supply was beginning to tighten in wake of a planned agreement by major crude producers to cut output.
News that the U.S. imposed fresh sanctions on some Iranian individuals and entities, days after the White House put Tehran "on notice" over a ballistic missile test, further supported gains.
On the ICE Futures Exchange in London, Brent oil for April delivery tacked on 25 cents, or about 0.5%, to settle at $56.81 a barrel by close of trade Friday. Prices climbed to a four-week high of $57.45 in the prior session.
London-traded Brent futures scored a gain of $1.36, or approximately 2.4%, on the week.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in March rose 29 cents, or around 0.6%, to end at $53.83 a barrel by close of trade. On Thursday, Nymex futures touched a high of $54.34, a level not seen since January 3.
For the week, New York-traded oil futures gained 66 cents, or about 1.2%, the third straight weekly rise.
Oil was boosted after Russian Energy Minister Alexander Novak said that crude producers had cut their output as agreed under a deal with OPEC, adding to signs of compliance with a global pact to scale back production.
Novak said that Russian companies might cut oil production more quickly than required by its deal with late last year. He added that 1.4 million barrels per day was already cut from global oil output last month as part of the deal.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months.
The deal, if carried out as planned, should reduce global supply by about 2%.
Futures have been trading in a narrow range around the mid-$50s over the past month as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 17 last week, the 13th gain in 14 weeks.
That brought the total count to 583, the most since November 2015.
The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
Elsewhere on Nymex, gasoline futures for March rose 2.0 cents, or nearly 1.4% to $1.553 a gallon. It ended up about 1.8% for the week.
March heating oil added 1.3 cents, or 0.8%, to finish at $1.665 a gallon. For the week, the fuel gained around 2.9%.
Natural gas futures for March delivery slipped 12.4 cents, or almost 4%, to $3.063 per million British thermal units. It posted a weekly loss of around 9.7%.
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, investors will keep an eye out for the International Energy Agency's monthly report to gauge global supply and demand levels.
Traders will also continue to pay close attention to comments from global oil producers for further 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, February 7
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, February 8
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, February 9
The U.S. EIA is to produce a weekly report on natural gas supplies in storage.
Friday, February 10
The International Energy Agency will release its monthly report on global oil supply and demand.
Later in the day, Baker Hughes will release weekly data on the U.S. oil rig count.