Crude maintained losses after data showed a further rise in US oil rigs, but ended the week with modest gains. Benchmark Brent crude oil was up 70 cents a barrel at $56.54 by 1025 GMT, recovering from a drop of 82 cents on Wednesday. On Thursday, it ended at its highest level since July 2015.
With prices further out into 2018 and beyond even falling, the curve has fallen into what traders call backwardation, which makes it unattractive to store oil on chartered tankers.
Higher crude oil prices can have a positive impact on the earnings of oil and gas producers like Noble Energy (NBL), Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), and Continental Resources (CLR). Compared with a year earlier, the number of rigs is up by 202.
World oil prices are declining Feb.24 after the report about the growing volume of U.S. crude inventories over the last week.
West Texas Intermediate for April delivery was at US$53.99 a barrel, down 46 cents, on the New York Mercantile Exchange as of 12.43pm in London.
For the holiday-shortened week, oil futures advanced.More news: Amnesty International launches campaign demanding release of detained immigrant with brain tumor
While OPEC has agreed to shoulder 1.2 million bpd of the cut starting in January, the non-OPEC countries pledged to reduce their output by 558,000 bpd.
Analysts from Goldman Sachs Group Inc to Energy Aspects Ltd have said USA stockpiles were boosted by deliveries of crude purchased before oil producers started cutting output in January.
The producers noted that there was still room for improvement in oil prices, commending OPEC and other oil production countries. Prices have since moved upward, but growing supplies from the U.S.is hindering them from breaching the $60 a barrel mark.
The U.S. Energy Information Administration (EIA) reported a growth of 564,000 barrels in U.S. oil inventories, relative to the American Petroleum Institute's expectations for the draw of 884,000 barrels.
"It is apparent that US oil producers have turned the taps back on", said Phin Ziebell, a senior analyst at National Australia Bank. "It's a battle between how quick OPEC can cut without shale catching up", Nunan said, referring to U.S. drilling in shale formations that has shown an upsurge this year. OPEC's latest data shows the bloc has eliminated 890,000 barrels a day in January, the first full month after the agreement took effect, indicating a roughly 90% adherence rate among participant countries.