Oil futures settled higher for the fourth session in a row on Friday, extending a rally to the strongest level in around a month after the U.S. fired missiles at a Syrian government air base.
Oil pared some of the gains later in the session as concerns about a wider escalation in the region faded and U.S. economic data weighed on global markets.
On the ICE Futures Exchange in London, Brent oil for June delivery tacked on 35 cents, or around 0.7%, to settle at $55.24 a barrel by close of trade. The global benchmark hit $56.08 earlier Friday, the most since March 7.
London-traded Brent futures logged a gain of $1.71, or about 3.1%, on the week, the second weekly increase in a row.
Elsewhere, the U.S. West Texas Intermediate crude May contract inched up 54 cents to end at $52.24 a barrel by close of trade. It touched its highest since March 7 at $52.94 earlier in the session.
For the week, the U.S. benchmark rose $1.64, or around 3.1%.
Crude prices jumped overnight after two U.S. destroyers based in the Eastern Mediterranean fired 59 Tomahawk cruise missiles at a Syrian air base, which the U.S. said was in retaliation to Bashar al-Assad’s alleged use of chemical weapons against his own people.
But analysts said the initial knee-jerk reaction to the airstrike may have been overdone given Syria’s role as a very minor oil producer and after U.S. officials described the attack as a one-off event that would not lead to wider escalation.
Meanwhile, oil traders continued to focus on the ongoing rebound in U.S. shale production, which could derail efforts by other major producers to rebalance global oil supply and demand remained in focus.
Oilfield services provider Baker Hughes said late Friday that the number of active U.S. rigs drilling for oil rose by 10 last week, the 12th weekly increase in a row. That brought the total count to 672, the most since September 2015.
Earlier in the week, the U.S. Energy Information Administration said that crude oil inventories increased by 1.57 million barrels to yet another all-time high of 535.5 million.
It was the 13th weekly build in U.S. stockpiles in the past 15 weeks, feeding concerns about a global glut.
Market participants, however, remained optimistic that OPEC would extend its current deal with non-OPEC producers to cut output beyond June in an effort to rebalance the market.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Elsewhere on Nymex, gasoline futures for May tacked on 1.6 cents, or about 1% to end at its highest since August 2015 at $1.746 on Friday. It closed up around 2.7% for the week.
May heating oil added 1.5 cents to finish at $1.628 a gallon, the most since March 1. For the week, the fuel gained roughly 3.5%.
Natural gas futures for May delivery dropped 7.0 cents to $3.261 per million British thermal units, trimming its weekly gain to around 2.2%.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.
Traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, April 11
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Wednesday, April 12
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Thursday, April 13
The International Energy Agency will release its monthly report on global oil supply and demand.
The U.S. government is to produce a weekly report on natural gas supplies in storage.
Baker Hughes will release weekly data on the U.S. oil rig count. The report comes out one day earlier than usual due to Friday’s Easter holiday.
