Oil rises nearly 3% as Saudi signals OPEC deal extension

Oil prices rose nearly 3 percent on Friday, climbing further from five-month lows hit last week, after Saudi Arabia said OPEC was close to agreeing to extend an output production cut beyond June and as Wall Street rallied.

Brent crude futures gained $1.62, or 2.6 percent, to settle at $63.29 a barrel. US West Texas Intermediate (WTI) crude ended at $53.99 a barrel, up $1.40, or 2.7 percent.

Brent posted its third weekly decline, dropping nearly 2 percent, while WTI gained about 1 percent 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.

Oil prices were also supported by a rise in equity markets after a sharp slowdown in US job growth raised hopes of an interest rate cut by the Federal Reserve.