WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange pushed higher Friday, with the U.S. crude benchmark gaining 8% on the week and the RBOB and ULSD contracts up 3%. The Organization of Petroleum Exporting Countries and their Russia-led allies finalized additional production curbs of 500,000 barrels per day (bpd) to last through the end of March and Saudi Arabia pledged deeper voluntarily cuts to bring collective output down by 2.1 million bpd.
A blowout jobs report released Friday morning by U.S. Department of Labor also fueled the market's rally, easing fears of slowing fuel demand in the world's largest economy. The Labor Department reported a much better-than-expected 226,000 gain in non-farm employment for November.
At settlement, NYMEX January West Texas Intermediate futures advanced $0.77 to $59.20 per barrel (bbl) and ICE February Brent contract snatched a dollar gain to $64.39 bbl. NYMEX January ULSD futures advanced 1.91 cents to $1.9521 gallon and NYMEX January RBOB futures rallied 2.63 cents to end the session at $1.6474 gallon.
Crude contracts settled at 11-week highs on Friday after the group of producers collectively known as OPEC+ agreed on new aggressive curbs that add to their existing 1.2 million bpd production agreement, as they seek a global drawdown of oil inventories.
The new agreement means the coalition will hold back a total of roughly 1.7 million bpd from the global oil market, but investors remained skeptical that the move would result in real reductions, capping the gains for the oil complex earlier in the session. For instance, Saudi Arabia pledged to reduce output by 167,000 bpd to 10.151 million bpd, according to OPEC delegates. Based on independent estimates used by OPEC, Saudi Arabia is already producing 400,000 bpd below its current quota. Russia -- the second largest producer within the group -- kept its quota unchanged at 11.2 million bpd, while being granted an exclusion for condensate production into next year that some analysts believe will allow the country to directly compete with U.S. shale producers for market share. Meanwhile, several countries like Iran, Venezuela and Libya will remain untouched by the deal.
OPEC+ has been operating under a production agreement for over two years, ceding global market share as production outside the group has surged, mostly driven by output gains in the United States.
Domestically, the number of active oil rigs in the United States declined for the seventh consecutive week through Friday, falling five to a fresh low at 663 -- the fewest number of active U.S. oil rigs since the end of March 2017. Companies operating in the U.S. oil patch have so far laid down 50 rigs in the fourth quarter, 222 rigs year to date, while the U.S. oil rig count is down 214 against year ago.
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