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US crude settles at $47.84, breaking three-week losing streak

Oil prices were little changed on Friday, as evidence that U.S. production was still rising overshadowed hopes that the global crude glut would diminish on expected production cut extensions from OPEC and other producing countries.

A weekly report by Baker Hughes showed American drillers added oil rigs for the 17th straight week in a row. The number of rigs drilling for new production jumped by 9 to a total of 712, versus 318 at this time last year.

U.S. West Texas Intermediate (WTI) crude oil futures ended Friday's session at $47.73 per barrel, eking out a 1 cent gain on the day and posting the biggest weekly gain in six weeks.

Brent crude futures, the international benchmark for oil prices, rose 6 cents to $50.83 per barrel by 2:36 p.m. ET (1836 GMT) on Friday.

On Thursday, oil prices rallied as a larger-than-expected weekly draw in U.S. crude inventories of 5.3 million barrels suggested that output cuts by OPEC and other producers were helping reduce a global glut in crude, analysts said.

A day later, "we're seeing a pullback in price," said Andrew Lipow, president of Lipow Oil Associates in Houston.

"The market overall is trying to balance OPEC and non-OPEC production cuts with increasing production all over the world as they reduce their costs and improve their efficiency."

Prices pared early gains in late morning trade after U.S. crude briefly breached a technical support level at $48 a barrel.

"That $48 level is a key support point," said John Kilduff, partner at energy hedge fund Again Capital. "You're seeing selling pressure come in at that level."

U.S. crude production has risen more than 10 percent since mid-2016 to more than 9.3 million bpd, close to the levels of top producers Russia and Saudi Arabia.

Norwegian consultancy Rystad Energy said U.S. output had gained "significant momentum." U.S. output, excluding Alaska, would expand by 390,000 bpd from May 2017 to December 2017, assuming a U.S. light crude price of $50, it said.

Lipow said the market is also "slowly taking note" of increased production in Canada.

OPEC and other producers meet on May 25 to decide whether to extend cuts. Saudi Arabia, OPEC's de facto leader, has said it expects an extension to the end of 2017 or possibly beyond.

Commerzbank said in a note it was skeptical about OPEC's ability to support prices in the long term.

"Owing to the rapid recovery in U.S. oil production, OPEC obviously only has limited influence on prices via supply curbs," it said, adding an extension "is unlikely to be more successful than the cuts implemented so far in the longer-term."

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said the market will be watching for a possible drawdown in U.S. rig counts.

"The market needs to be looking for a sign you've been getting a response 1/8 to lower prices 3/8 from U.S. producers. That's part of what's going to keep this floor in on the oil prices," he said.

— CNBC's Tom DiChristopher contributed to this report.