Crude oil prices ended sharply higher on Friday, extending gains to a fifth successive session, after stronger than expected U.S. jobs data and an encouraging report on Chinese services sector activity eased concerns about global growth and energy demand prospects.
Hopes that output reductions by major oil producers like Saudi Arabia and Russia would help ease concerns about excess supply in the market contributed as well to oil's uptick.
Oil output from OPEC fell by 530,000 barrels a day to 32.6 million a day last month, a Reuters survey found, marking the sharpest pullback since January 2017 as top exporter Saudi Arabia throttled back production.
Meanwhile, data released by the Energy Information Administration today showed crude inventories in the U.S. rose by 7,000 barrels in the week to December 28, beating expectations for a drop of more than 3 million barrels.
Distillate stockpiles were up by 9.5 million barrels last week, the biggest weekly jump in two years. Gasoline stocks rose by 6.9 million barrels, more than thrice the expected increase.
American Petroleum Institute reported yesterday that U.S. crude inventories fell by 4.5 million barrels during the week ended December 28.
Crude oil futures for February ended up $0.87, or 1.9%, at $47.96 a barrel, extending gains to a fifth successive session.
On Thursday, crude oil futures ended up $0.55, or 1.2%, at $47.09 a barrel. For the week, oil futures gained about 5.8%, the best weekly returns in about 17 months.
China's commerce ministry said that China and the United States would hold vice ministerial level trade talks in Beijing on January 7-8 in a bid to defuse trade tensions.
Data released by Markit said growth in China's services sector edged higher in December. The Caixin/Markit services PMI rose to a six-month high of 53.9 in December from 53.8 in November.
The Labor Department's report showed a much stronger than expected job growth in the U.S. in the month of December. The report said non-farm payroll employment soared by 312,000 jobs in December after climbing by an upwardly revised 176,000 jobs in November.
Economists had expected employment to increase by about 177,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.