UPDATE: Oil ends below $50 a barrel as U.S. rig count continues to climb

04/21/17 03:24 PM EDT

By Myra P. Saefong, MarketWatch , Sarah McFarlane

U.S. benchmark sees 7% weekly decline

Oil futures fell on Friday, with the U.S. benchmark ending below $50 a barrel and notching a weekly loss of roughly 7%.

The latest weekly rise in active U.S. oil rigs offered another sign of further growth in U.S. crude production, casting doubts that the Organization of the Petroleum Exporting Countries will agree to extend its product-cut deal into the second half of the year.

June West Texas Intermediate crude fell by $1.09, or 2.2%, to settle at $49.62 a barrel on the New York Mercantile Exchange. The settlement was its lowest since March 29, according to FactSet data.

June, which saw its first full day of trading as a front-month contract Friday posted a weekly loss of 7.4%. Based on the most-active contracts, however, prices lost 6.7%. Either way, it was the first weekly loss since the week ended March 24.

Declines in WTI accelerated in late morning trading as U.S. equities fell (http://www.marketwatch.com/story/us-stocks-set-for-small-opening-gains-as-french-election-fears-linger-2017-04-21) "on France election uncertainty and oil, being in a weak technical position, followed along," said Phil Flynn, senior market analyst at Price Futures Group.

Read:When are the French election results out on Sunday? (http://www.marketwatch.com/story/when-are-the-french-election-results-out-on-sunday-2017-04-20)

Prices then held on to their losses after Baker Hughes (BHI) reported another weekly rise in the U.S. oil-rig count.

June Brent crude on London's ICE Futures exchange lost $1.03, or 1.9%, to $51.96 a barrel--ending 7% lower for the week.

Signs of a possible extension, which would help to offset output increases in the U.S., have provided some support for oil prices in recent weeks. Saudi Arabia Energy Minister Kalid al-Falih said Thursday that a handful of cartel members have reached a tentative agreement (http://www.marketwatch.com/story/opec-set-to-extend-output-deal-says-saudi-energy-minister-2017-04-20) to cut more supplies.

Oil prices ticked higher initially after the comments Thursday from Saudi Arabia's energy minister, but quickly lost steam as analysts said the remark only stirred up more uncertainty.

On Friday, Russian Energy Minister Alexander Novak said Russia, which isn't part of OPEC, would discuss the possible extension of the output deal with OPEC on May 24, according to Reuters. That would come a day before OPEC's member meeting in Vienna.

But "until the trend, and specifically the pace of rising U.S. production, slows or reverses, it will be very difficult for oil prices to sustain any material gains in the medium term," said Tyler Richey, co-editor of the Sevens Report.

Read: Here's what Venezuela's deepening crisis means for oil prices (http://www.marketwatch.com/story/heres-what-venezuelas-deepening-crisis-means-for-oil-prices-2017-04-20)

Data from Baker Hughes Friday afternoon showed that U.S. rigs drilling for oil rose (http://www.marketwatch.com/story/baker-hughes-data-show-us-oil-rig-count-edged-higher-this-week-2017-04-21) by 5 to 688 this week. That marked a 14th weekly climb in a row.

Back on Nymex, May gasoline fell 1.6% to $1.645 a gallon, down about 5.2% for the week, and May heating lost 1.6% to $1.553 a gallon, for a weekly loss of 5.8%.

May natural gas ended at $3.101 per million British thermal units, down 1.8% for the session and about 3.9% lower for the week. U.S. data Thursday showed a bigger-than-expected (http://www.marketwatch.com/story/eia-reports-weekly-bigger-than-expected-rise-in-us-natural-gas-supplies-2017-04-20) weekly rise in supplies of the commodity.

Among exchange-traded funds, the United States Oil Fund (USO) fell 1.9%, trading 7.1% lower on the week.

--Jenny W. Hsu contributed to this report

-Myra P. Saefong; 415-439-6400; AskNewswires@dowjones.com


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04-21-17 1524ET

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