Crude oil futures rose on Friday as traders closed out contracts for next month and also on investors' belief that supplies are not as plentiful as a government report at first suggested.
Light, sweet crude for delivery next month rose US$1.67 to settle at US$95.10 a barrel on the New York Mercantile Exchange. But January crude, which now becomes the front-month contract, closed US$1.26 below that, settling up US$1.77 at US$93.84 a barrel.
Next month's crude had lost US$0.66 in the previous session after the Energy Department's Energy Information Administration (EIA) reported an unexpected 2.8 million barrel increase in inventories last week. But much of that supply build occurred on the West Coast, where the energy infrastructure is largely isolated from the rest of the US, analysts said.
"I think the market may have realized overnight that that EIA report wasn't that bearish," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
Reports that ministers from the Organization of Petroleum Exporting Countries were planning to release a statement rejecting US requests that OPEC increase production also were supporting prices, analysts said. Earlier this week, Energy Secretary Samuel Bodman said he has asked OPEC to boost output.
However, those reports appeared to contradict a Thursday statement by OPEC Secretary General Abdalla Salem el-Badri that the group was ready to increase oil production "if that will contribute to lower the [crude] price."
Next month's crude fell US$1.22 a barrel, or 1.2 percent, this week, but rose US$9.83, or 12 percent, during its month as the lead crude contract.