- WTI rallies 2.8% to 59.36/barrel; Brent up 3.2% to $64.58/barrel.
- US rig count declines by one to 658 in week ending May 22.
- OPEC expected to keep its production target unchanged at 30 million bpd at next week’s meeting in Vienna.
Crude oil ended the week on a high note, climbing nearly 3 percent on renewed optimism that US production would eventually slow following another decline in the active rig count.
West Texas Intermediate (WTI) for July delivery climbed $1.66 or 2.8 percent to $59.36 a barrel. The US benchmark is poised to break even on the week after plunging below $57 on Thursday.
North Sea Brent crude rallied $2 or 3.2 percent to $64.58 a barrel. The global benchmark eased off 2015 highs earlier this month and continued to fall in mid-week trading as the US dollar rallied.
Brent crude has averaged nearly $58 a barrel so far this year, down from almost $100 in 2014.
Oil Rig Count Declines
Oil prices rallied after Baker Hughes published its weekly oil rig count report, which showed crude oil rigs declined by one to 659 for the week ending May 22. Despite the modest drop, it was the lowest level in 24 weeks and less than half of year-ago levels (1,528). Compared to the same week last year, active oil rigs have declined by 869.
Declining oil rigs and falling inventory levels support the notion that US crude production will eventually slow. On Thursday the government-funded Energy Information Administration (EIA) said US commercial crude supplies declined for a fourth consecutive week, falling 2.8 million to 479.4 million barrels.
The Organization of the Petroleum Exporting Countries (OPEC), a 12-nation cartel that accounts for about 45 percent of global production, will hold a meeting in Vienna next week. The cartel is widely expected to keep its production target unchanged at 30 million barrels a day, but keep output above that level.