Oil prices firmed on Friday as market sentiment was lifted by a report that OPEC could extend production cuts in order to have a significant impact on a global fuel oversupply.

Brent crude futures traded up 8 cents from their last settlement at $55.73 per barrel. Meanwhile, U.S. WTI crude futures rose 7 cents at $53.43 per barrel.

The producer cartel and other producers have reached an accord last year to lower their production by the first half of the year, and have managed to have around 90% compliance rate of the agreed upon 1.8 million bpd cut. The reductions were made to curb the oil glut that has persisted in oil markets since 2014.

Still, inventories continued to swell and supplies high despite these actions, particularly in the U.S. Last week, crude inventories surged by 9.5 million barrels, almost threefold of analysts estimate. Gasoline stocks added 2.8 million bpd during the same period, contrary to the seen 752, 000 barrel decline.

In order to further aid in rebalancing the market, OPEC sources told Reuters that the pact could be extended if all major exporters fully complied to the agreement. Traders stated that until more details regarding a possible extension of production cuts was attained, oil prices' gains would be limited.

Related news

Tesla Inc.'s corporate bonds declined a week after they were sold, as fervor over Elon Musk's rollout of the Model 3 was cooled by geopolitical tension and skepticism among investors regarding how little they're getting paid.

The firm's $1.8 billion of 5.3 percent notes due to mature in 2025 fell below par almost instantaneously, falling to trade as low as 97.4 cents on the dollar on Friday, data from Bloomberg showed. The eight-year securities had priced a week prior at a record-low yield for a bond given its rating and maturity and Tesla had issued $300 million more to the offering in order to meet the strong demand.

The company, which is rated below investment grade, has pitched to investors that it requires years to generate expendable cash. Musk has personally called on investors for Tesla's debut offering in the junk-bond market, which ultimately received orders for around doubt the initial offering.

The demand will enable the company to bolster the size of the sale even as investors and analysts caution about Tesla's lack of profit and its high level of cash burn.

Tesla's stock ended down 1 percent to $4348.56 in New York after a 3 percent decline on Thursday.

Oil prices sharply increased on Friday, as the dollar weakened and U.S. drillers shuttered some rigs, powering a rally that bolstered the global benchmark Brent crude to post a weekly gain while the U.S. crude ended the week virtually flat.

U.S. WTI crude futures for September delivery increased $1.42 to $48.51 per barrel, marking a 3 percent increase. Brent crude oil futures advanced $1.69 or 3.3 percent to trade at $52.72 per barrel.

Prices of both benchmarks had been both poised for weekly declines of over 2 percent, by the sharp rally on Friday left the Brent with a 1.5 percent weekly gain, while the U.S. crude closed the week almost unchanged, falling by just 0.3 percent.

U.S. energy companies reduced the number of oil rigs by five down to 763, marking the second week out of three such drop happened, according to Baker Hughes energy services firm. Drillers also reduced their capex plans in response to the declining crude prices.

Official data released earlier in the week indicated that crude production in the U.S. was still increasing.

The Treasury markets found itself back where it almost began in a volatile trading week that was focused on the turmoil of President Donald Trump's administration, dissimilar economic data, the dovish tone of policymakers in the latest Fed minutes and a terrorist attack in Spain.

The Friday's trade highlighted the increased volatility, as reports that Trump forced Steve Bannon to step down as White House chief strategist prompted some trading before activity eased.

The two-year government bond's yield increased by less than a basis point to 1.314 percent, adding up to a weekly increase of 2 basis points, marking its biggest rise in six weeks.

Meanwhile, the 10- year benchmark Treasury yield as almost flat for both Friday and the week, ending at 2.196 percent. The long bond or the 30-year Treasury bond's yield was unchanged on the day at 2.779 percent, but posted a weekly decline of 1.1 basis point.

Yields managed to climb back up from their intraday lows after reports surfaced that Trump has fired Bannon. Bond traders were divided if the news would give stability to the Trump administration, after the president's comments to a violent incident at a white-supremacist rally in Virginia elicited turmoil in Washington.

See also: Current support and resistance levels
Aug 20 at 13:42 UTC

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