Oil prices ended unchanged for Fridayâ€™s session, but marked the biggest weekly gain since late July on expectations of stronger global demand and a decline in world-wide supplies of crude last month.
â€œAs Hurricane Harvey begins to fade as a short-term factor, the market is taking a closer a look at longer-term bullish developments on both the [Organization of the Petroleum Exporting Countries] and U.S. side of the market,â€ said Robbie Fraser, commodity analyst at Schneider Electric, in a note.
â€œFor OPEC, reports indicate a strong recovery for overall [production-cut] compliance levels in Augustâ€¦adding credibility moving forward,â€ Fraser said. â€œThat has coupled with an increasing likelihood of a formal deal extension to support prices.â€
The International Energy Agency reported Wednesday that global oil supply dropped in August and raised its outlook for demand this year.
And â€œon the U.S. side, steadily declining rig counts of late have raised the possibility of stalled U.S. production gains, with current output still holding below pre-Harvey levels,â€ said Fraser.
Baker Hughes BHGE, +1.43% Â on Friday reported that the number of active U.S. oil rigs fell for a second week in a row, by 7 to 749 rigs.
October West Texas Intermediate crude on the New York Mercantile ExchangeCLV7, -0.12% settled unchanged at $49.89 a barrel after hitting an intraday high above $50. The U.S. benchmark traded as high as $50.50 intraday Thursday, a level it hasnâ€™t seen since May.
November Brent LCOX7, +0.02% on ICE Futures Europe rose 15 cents, or 0.3%, to $55.62 a barrel.
WTI crude saw a 5.1% weekly rise. Brent ended about 3.4% higher for the week, with both benchmarks marking the strongest weekly gains since the week ended July 28.
Oil climbed for the week as U.S. refineries and other facilities resumed operations following Hurricane Harvey, which knocked out several Texas Gulf Coast facilities. U.S. and global benchmarks posed gains in each of the last four sessions, with thelatest North Korea missile test providing a short-lived reason for oil investors to pull back a touch.
In a note, Wood Mackenzie said that in the event of a military conflict in the Korean Peninsula, shipping lines handling a third of global seaborne-crude trade could be disrupted, while half of Asiaâ€™s refining capacity could be at risk.
Meanwhile, WTI crude narrowed its discount to Brent this week. The price spread between the two had widened in recent months and appears to be heading toward a â€œnew equilibriumâ€ between $4 to $5 a barrel, analysts at Vienna-based JBC Energy wrote in a Friday note.
The â€œvastly improved arbitrage economicsâ€ could see U.S. crude exports surge beyond 1 million barrels a day on a weekly basis in the next few weeks, with October potentially setting a new monthly record for U.S. crude exports, they wrote.
On Nymex, October gasoline RBV7, +2.00% Â rose 3.3 cents, or 2%, to $1.662 a gallon, settling about 0.9% higher for the week, while October heating oilHOV7, +1.03% Â gained 2.1 cents, or 1.2% to $1.799 a gallon, for a weekly rise of 1.9%.
October natural gas NGV17, -1.14% Â declined 4.6 cents, or 1.5%, to $3.024 per million British thermal units, paring its weekly rise to 4.6%.
Among exchange-traded products, the U.S. Oil Fund USO, +0.69% Â rose 0.7%. It was poised for a weekly rise of 4.8%.
â€”Biman Mukherji contributed to this article