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Oil futures fell for the first time in three sessions on Friday, but still scored their third weekly gain in a row as market players awaited details of a planned output cut by the Organization of the Petroleum Exporting Countries.
On the ICE Futures Exchange in London, Brent oil for December delivery slipped 58 cents, or 1.1%, on Friday to settle at $51.93 a barrel by close of trade. The contract rallied to $52.84 earlier in the day, the most since June 9.
For the week, London-traded Brent futures surged $1.74, or 3.35%, the third straight weekly gain.
Crude prices have been on a bullish trend ever since OPEC members surprised the market late last month by agreeing to a framework to cut production for the first time in eight years in talks held on the sidelines of an energy conference in Algeria.
The oil cartel reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day, a reduction of 0.7%-to-2.2% from its current output of 33.2 million barrels.
However, market analysts remained skeptical of the deal, pondering how such a plan would be implemented.
OPEC oil producers plan an informal meeting with non-OPEC member Russia on the sidelines of the World Energy Congress in Istanbul, Turkey, which runs from October 9-13 to discuss how to implement such a deal. No decision however is expected to be taken in Istanbul, OPEC sources said.
The 14-member oil group said it won’t finalize details or complete its production agreement until the group’s next official meeting in Vienna on November 30.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in November slumped 63 cents, or 1.25%, to end the week at $49.81 a barrel. Prices touched a four-month peak of $50.74 earlier Friday.
Market players continued to focus on U.S. drilling prospects, amid indications of an ongoing recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 3 to 428, marking the 14th increase in 15 weeks.
Some analysts have warned that the current rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, underlining concerns over a global supply glut.
Despite Friday's losses, New York-traded oil futures rose $1.57, or 3.15%, on the week, after posting gains in each of the past two weeks.
Data showing U.S. crude supplies fell for the fifth week in a row boosted the demand outlook in the world's largest oil consumer. According to the U.S. Energy Information Administration, crude oil inventories fell by 3.0 million barrels last week to 499.7 million, the lowest since January.
In the week ahead, oil traders will focus on U.S. stockpile data on Wednesday and Thursday for fresh supply-and-demand signals. The reports come out one day later than usual due to Monday's Columbus Day holiday.
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.
Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Tuesday, October 11
The International Energy Agency will release its monthly report on global oil supply and demand.
Wednesday, October 12
The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.
The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.
Thursday, October 13
The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.
Friday, October 14
Baker Hughes will release weekly data on the U.S. oil rig count.