Investing.com - Oil prices ended Friday's session close to their strongest level since late 2014, amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.
Prices also drew support from a weakening U.S. dollar, which on Friday hit new three-year lows against a basket of other leading currencies.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
U.S. West Texas Intermediate (WTI) crude futures for March delivery tacked on 63 cents, or around 1%, to close at $66.14 a barrel. The U.S. benchmark reached its best level since Dec. 4, 2014 at $66.66 on Thursday.
Meanwhile, April Brent crude futures, the benchmark for oil prices outside the U.S., inched up 18 cents, or roughly 0.3%, to settle at $70.15 a barrel. The contract touched $70.78 on Thursday, a level not seen since Dec. 2014.
For the week, WTI crude gained roughly 4.4%, while Brent rose about 2.8%, the fifth such rise in six weeks.
Oil prices have risen almost 60% from around $43 a barrel in June, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.
The number of oil drilling rigs climbed by 12 to 759 in the week to Jan. 19, General Electric (NYSE:GE)'s Baker Hughes energy services firm said in its closely followed report on Friday. That marked the biggest weekly increase in the rig count since March.
Domestic U.S. output has rebounded by 17% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.
U.S. oil production rose to 9.87 million barrels per day last week, according to government data released during the week, the highest level since the early 1970s and close to the output of top producers Russia and Saudi Arabia.
Among other energy contracts, March gasoline futures added 1.7 cents, or 0.9%, to end at $1.926 a gallon on Friday, with prices notching a weekly climb of around 4%.
Heating oil for March edged up 1.7 cents, or 0.8%, to $2.127 a gallon, posting a weekly gain of around 3.8%.
Meanwhile, natural gas futures surged 7.6 cents, or 2.5%, to $3.175 per million British thermal units. It soared about 10% for the week, as traders bet that frigid weather would drive hefty declines in supplies of the heating fuel.
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.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday
The U.S. government will also publish a weekly report on natural gas supplies in storage.
Friday
Baker Hughes will release weekly data on the U.S. oil rig count.