Oil rose modestly on Friday in a spate of late-day activity, but fell on the week as concerns persisted over an excess of crude.
Continue Reading Below
U.S. West Texas Intermediate (WTI) crude futures settled up 27 cents to $47.97 a barrel, but lost 0.5 percent on the week. About 390,000 WTI contracts had changed hands, lower than the average of about 520,000 over the last 200 days.
Brent crude ended up 24 cents to $50.80, and ended down 1.8 percent this week.
Oil has been on the back foot for more than two weeks now, after a string of U.S. inventory reports suggested that output cuts by the Organization of the Petroleum Exporting Countries were not having the desired effect in reducing global oversupply.
On Thursday, a Saudi energy ministry official told Reuters that crude exports to the United States in March would fall by around 300,000 barrels per day (bpd) from February and hold at those levels for the next few months.
The official said the expected drop, in line with OPEC's agreement, could help draw down U.S. inventories that stood at a record 533 million barrels last week - stocks that have in part remained buoyant because of reduced seasonal refining runs.
"We still are at record high inventories here in the U.S.," said Andrew Lipow, president of LipowOil Associates in Houston. "We're seeing some short-covering given the recent declines in the price."
Saudi exports to other regions, notably Asia, remained elevated despite the OPEC-led deal that includes other producers like Russia to cut output by 1.8 million bpd during the first half of the year.
Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.
"OPEC's goal of drawing down inventories to normal levels is not going to be reached before their agreement expires on June 30," said U.S. investment bank Jefferies in a note to clients.
Many are now watching for whether OPEC, whose committee monitoring the cuts will meet over the weekend in Kuwait, will extend the deal.
In Russia, private oil producers are ditching their skepticism and lining up behind an extension of output cuts after previous oil price increases compensated for lost income.
In the United States, shale drilling has pushed up oil production
The latest U.S. drilling rig count showed an increase of 14 rigs, the tenth straight weekly rise, according to Baker Hughes data.