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US oil settles down 97 cents, or 1.71%, at $55.74 a barrel

A worker adjusts the valve of an oil pipe at West Qurna oilfield in Iraq's southern province of Basra.
Atef Hassan | Reuters
A worker adjusts the valve of an oil pipe at West Qurna oilfield in Iraq's southern province of Basra.

Oil prices closed lower on Friday after Baker Hughes said the number of U.S. rigs for drilling fell to the lowest since 2010 this week, suggesting the collapse in drilling may be coming to an end after slumping crude prices caused energy companies to idle half of the country's rigs since October.

The weekly count fell by 26 rigs, bringing the total number of rigs drilling for oil in the United States to 734, the oilfield services firm said. The rig count has fallen for 19 consecutive weeks.

U.S. crude for May closed down 97 cents, or 1.71%, at $55.74 a barrel. Brent for June was down 50 cents at $63.50 a barrel, after trading in positive territory above $64 earlier. Brent reached a 2015 high of $64.95 on Thursday.

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Brent crude dipped in and out of positive territory earlier on Friday as turmoil in Yemen and the Middle East limited price pressure after the Organization of the Petroleum Exporting Countries said its March production jumped by 810,000 barrels per day to 30.79 million bpd, led by Saudi Arabia.

Brent and U.S. crude contracts rallied to 2015 peaks on Thursday, lifted by the conflict in Yemen and the prospect that lower prices are starting to curb U.S. shale output.

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Military units protecting Yemen's Masila oilfields, the country's largest, withdrew on Friday and handed over security responsibilities to armed local tribes.

While Yemen is not a major oil producer, the conflict raises concern about risks to supply from major exporters in the region such as its neighbor Saudi Arabia.

Prices also drew support from traders closing out short positions on Friday, as they grew encouraged by strong technical factors said Rob Montefusco, senior oil trader at Sucden Financial.

"Technically, Brent is looking in better shape at the moment," he said. "$65 a barrel is the next target we need to break for upward momentum."

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Brent and U.S. crude pushed above their 100-day moving averages this week. Brent's 50-day of $58.18 moved above its 100-day at $57.90 on Friday, a bullish move called a "golden cross" by chart watchers. That puts the 100-day average as a new major support level.

Oil prices have plunged more than 50 percent from June 2014 amid a global supply glut.