Oil futures edged higher on Friday with a lift from a weaker dollar, but finished a fifth straight week lower as OPEC-led production cuts have failed to substantially reduce a global crude glut.
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For the week, both benchmarks lost 3.9 percent, and oil currently sits just off 10-month lows, beset by ongoing worries about rising production. The five-week slide represents the longest stretch of weekly declines for the front-month contracts since August 2015.
Prices pared earlier gains after oil services firm Baker Hughes
"The higher rig count this week reflects decisions made a couple of months ago when oil prices were higher," said James Williams, president of WTRG Economics in Arkansas. He said he expects the current low prices to cause the count to fall in some weeks over the next month or two.
The U.S. dollar <.DXY> was down 0.3 percent against a basket of currencies, on track for its biggest daily percentage decline since early June after weaker-than-expected U.S. economic data. This boosted greenback-denominated oil.
Still, oil prices remain down about 20 percent this year despite an effort led by the Organization of the Petroleum Exporting Countries to cut production 1.8 million barrels per day (bpd).
It puts the market on course for its biggest first-half percentage fall since the late 1990s, when rising output and the Asian financial crisis led to sharp losses.
"We doubt that demand growth will accelerate sufficiently to break the current downward price momentum," analysts at Bank of America Merrill Lynch said in a note on Friday, citing surprisingly weak recent economic data in the United States, China and Asia.
OPEC-led efforts to reduce production and end the oil glut have been frustrated by soaring output from the United States and OPEC members Libya and Nigeria, which are exempt from the cuts.
Thanks to shale drillers, U.S. oil production
"Rising U.S. output continues to stress markets, with increasing evidence that improved efficiency and technology makes many of the shale plays profitable below $40 a barrel," analysts at Cenkos Securities wrote.
(Additional reporting by Karolin Schaps in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and David Gregorio)