07.07.202319:11:00UTC+00Oil Futures Settle Sharply Higher, End Week With Strong Gains

Oil prices rose sharply on Friday, continuing to find support from the recent data showing a big drop in U.S. crude inventories.

Oil prices were also supported by recent announcements from Saudi Arabia and Russia that they will cut crude output further. The move by the two major oil producers will result in output from OPEC+ dropping to around 5 million barrels per day, or about 5% of global oil demand.

A weak dollar contributed as well to the uptick in oil prices.

West Texas Intermediate Crude oil futures for August ended higher by $2.06 or about 2.9% at $73.86 a barrel. WTI crude futures gained about 4.6% in the week.

Brent crude futures were up $1.93 or 2.5% at $78.45 a barrel a little while ago.

Data released by the Energy Information Administration (EIA) on Thursday showed crude inventories in the U.S. fell by 1.508 million barrels in the week ended June 30, suggesting resilient demand.

Gasoline stockpiles fell by 2.550 million barrels in the week, much more than an expected drop of 1.417 million barrels, while distillate stockpiles dropped by 1.045 million barrels, as against expectations for an increase of about 0.300 million barrels.

According to a report from Baker Hughes, the total number of total active drilling rigs in the U.S. rose by 6 this week, after seeing a drop of 7 in the previous week.

The total rig count rose to 680 this week, 72 rigs below this time last year.

The number of oil rigs declined by 5 this week to 540, while the number of gas rigs rose by 11, to 135.