NEW YORK: Oil prices rose nearly 2% on Friday, climbing further from five-month lows hit this week, after Saudi Arabia said OPEC was close to agreeing to extend an output production cut beyond June.
Brent crude futures gained $1.12, or 1.8%, to $62.79 a barrel, by 1:17 p.m. EDT (1717 GMT). US West Texas Intermediate (WTI) crude rose 92 cents, or 1.8%, to $53.51 a barrel.
Brent was on track for its third weekly decline, dropping nearly 3%, while WTI was unchanged for the week. On Wednesday both benchmarks hit their lowest since January.
Saudi Energy Minister Khalid al-Falih told a conference in Russia that the Organization of the Petroleum Exporting Countries (OPEC) and its allies should extend oil production cuts.
He said that while OPEC was close to agreement, more talks were needed with non-OPEC countries that were part of the deal to reduce output by 1.2 million barrels per day (bpd), which runs out at the end of this month.
Supply has also been limited by US sanctions on oil exports from Venezuela and Iran. On Thursday, Washington tightened pressure on Venezuela's state-owned oil company by making clear that exports of diluents by international shippers could be subject to sanctions.
In the United States, energy firms this week reduced the oil rig count to the lowest since February 2018. Drillers cut 11 rigs in the biggest weekly decline since April, bringing the total count down to 789, General Electric Co's Baker Hughes energy services firm said.
Demand sentiment remains weak as investors worry about a stalling global economy and an intensifying trade war between the United States and China.
The United States has also threatened tariffs on goods from major trading partner Mexico. US President Donald Trump vowed that tariffs of 5% will be imposed on all Mexican exports to the United States on Monday if Mexico does not step up efforts to stem an increase in migrants heading for the US border.
US and Mexican negotiators resumed migration talks on Friday. Marc Short, chief of staff to US Vice President Mike Pence, said the administration planned to move forward with a legal notification of its planned 5% tariff.
But some market participants were skeptical the tariffs would go into effect on Monday.
"We believe that Trump will delay any tariffs as he will attempt to preclude another dive in the stock market," Jim Ritterbusch of Ritterbusch and Associates said in a note.
Because of weak economic data and the widening trade conflict, Commerzbank revised their third-quarter forecast for Brent down to $66 from $73 a barrel.