Oil Prices Up as Bigger Producers Stick to Cuts

Oil prices ticked higher Friday, capping a tumultuous week for a market that continues to be plagued by a global glut.

Light, sweet crude for August delivery settled up 27 cents, or 0.6%, at $43.01 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, gained 32 cents, or 0.7%, to $45.54 a barrel on ICE Futures Europe.

That wasn't enough to overcome large losses from earlier this week, leaving U.S. prices down 4.4% and global prices down 3.9% over the last five sessions. Both are on five-week losing streaks, the longest for U.S. oil since 2015.

Signs that big producers are abiding by their deal to limit output and weather-related output challenges in the U.S. supported prices. The recent moves higher came after crude plunged into a bear market this week for the first time since last summer, as the oversupply is so far proving immune to the limits set by the Organization of the Petroleum Exporting Countries and its big-producer allies including Russia.

"Yes, we remain long-term bearish, but traders should be weary of selling down here," the Chicago brokerage iiTrader told clients in a note Friday. "Sentiment is a little too bearish at this moment and ahead of the weekend."

A monitoring committee made up of OPEC members and producers outside the group on Thursday said that compliance to the deal reached 106% in May, the highest since the deal was first clinched late last year.

In the U.S., production growth and crude inventories may show a decline next week as inclement weather in the Gulf of Mexico has shut a number of oil rigs and platforms, analysts say. According to JBS Energy, 300,000 barrels a day of production were shut in.

Any signs of deceleration in U.S. production would support the market, which is still mired in surplus. But for now, many analysts remain pessimistic about oil's outlook and dismissive of Friday's gains.

"It's noise," said Andy Lipow, president of Lipow Oil Associates in Houston. "The market remains under pressure from increasing production."

It is doubtful oil's spiral is over, analysts at Commerzbank said.

High global oil inventories are "raising market concerns about the efficacy of OPEC market management," said Jason Gammel, analyst at Jefferies. "We remain of the view that inventories will [decline in the second half of the year], but empirical evidence of this is likely necessary for oil prices to inflect into an upward trend."

Gasoline futures eased 0.04 cent, or 0.03%, to $1.4341 a gallon. They lost 2.07 cents, or 1.4%, for the week.

Diesel futures edged up 0.01 cent, or 0.01 %, to $1.3717 a gallon. They lost 5.53 cents, or 3.9%, for the week.

Write to Georgi Kantchev at georgi.kantchev@wsj.com, Jenny W. Hsu at jenny.hsu@wsj.com and Timothy Puko at tim.puko@wsj.com

(END) Dow Jones Newswires

June 23, 2017 20:19 ET (00:19 GMT)