Crude retains support

Oil prices continued the rally Friday that has seen crude tack on weekly gains of around 1.6% as prices remained supported by hopes that major oil producers will agree to extend their production cut agreement at their end of November meeting and investors looked ahead to the latest tally on U.S. shale production.

The U.S. West Texas Intermediate crude December contract gained 38 cents, or 0.70%, to $54.92 a barrel by 4:44AM ET (8:44GMT) Friday.

Elsewhere, Brent oil for January delivery on the ICE Futures Exchange in London 49 cents, or 0.81%, to $61.11 a barrel.

Crude oil prices settled higher on Thursday as ongoing production cuts by Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC members led by Russia, fueled expectations that global oil market rebalancing was underway.

Saudi Arabia continued to cut oil output as inventories declined significantly in October, Saudi Energy Minister Khalid Al-Falih said Thursday while compliance with the OPEC-led accord to curb output had been “excellent”.

Falih also expressed a desire to continue with output curbs, saying that OPEC should work to ensure stockpiles continue to fall beyond March. OPEC is slated to next meet at its headquarters in Vienna on November 30.

In May, major oil producers agreed to extend production cuts for a period of nine months until March 2018.

Russian remained in compliance with its part of the accord despite increasing output to 10.93 million bpd in October from 10.91 million bpd in September, official data showed Thursday.

The U.S., however, continued to ramp up weekly production to 9.55 million bpd, up 46,000 from a week ago, while exports rose to an all-time high of 2.13 million barrels per day, the Energy Information Agency (EIA) said Wednesday.

The rise in production was offset by a steeper-than-expected draw in U.S. crude inventories, which fell 2.4 million barrels in the week ended Oct. 27 while gasoline inventories declined by 1.8 million barrels.

Later on Friday, market participants will also keep an eye on U.S. shale production when Baker Hughes releases its most recent weekly rig count data.

Last week that oil services provider said that oil rigs operating in the U.S. rose by one to 737, snapping three consecutive weeks of declines.

The weekly rig count is an important barometer for the drilling industry and serves as a proxy for domestic oil production.

Elsewhere on Nymex, gasoline futures for December delivery advanced 0.65% at $1.7944 a gallon by 4:46AM ET (8:46GMT), while December heating oil traded up 0.30% to $1.8636 a gallon.

Natural gas futures for December delivery traded up 0.51% to $2.949 per million British thermal units.