US oil settles up $1.13, or 1.95%, at $59.13 a barrel

OPEC keeps pumping
OPEC maintains oil output
Goldman's oil targets

Oil prices jumped on Friday after Baker Hughes reported the number of rigs drilling for oil in the United States fell for the 26th consecutive week.

Drillers took a net four oil rigs out of U.S. oilfields in the previous week, bringing the national total to 642. At the same time last year, the rig count stood at 1,536.

U.S. crude futures closed up $1.13, or 1.95 percent, at $59.13 a barrel, having earlier touched a session low of $56.83. for July was up $1.20 a barrel to $63.20, off a session low of $60.94.

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The U.S. tight oil industry has been more resilient than many had expected, with falling costs helping sustain the revolution and possibly setting up another downward spiral.

Oil trader Andy Hall expects U.S. crude prices to rise above $65 a barrel despite the high global production of oil, citing the drop in the U.S. oil rig count as a factor.

"Despite a collapse in rig counts in the U.S., oil production has yet to register a sustained decline. But it will come," Hall said in a monthly letter to investors in his $3.3 billion Connecticut-based hedge fund Astenbeck Capital Management.

Oil seesawed in volatile trade on Friday, with Brent briefly hitting seven-week lows before recovering, as a surging dollar and an OPEC decision not to cut output in an oversupplied market sent crude prices on a roller-coaster ride.

Crude's biggest producers and shippers in the Organization of the Petroleum Exporting Countries (OPEC) group agreed at a meeting in Vienna to stick to a policy of unconstrained output for another six months. The decision ignored warnings of a second lurch lower in prices, with members such as Iran looking to ramp up exports.

Oil prices rose after the widely-expected OPEC decision, as market bulls embarked on a relief rally following the losses of the past two days, when both Brent and U.S. crude fell nearly 3 percent a day.

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The dollar's surge on a stronger-than-expected U.S. jobs report for May doused the enthusiasm, however. A stronger greenback typically makes dollar-denominated commodities such as oil less affordable to holders of the euro and other currencies.

Aside from the resurgent dollar and fears of a U.S. rate hike, the oil market was also spooked by the euro's tumble as Greece delayed repayment of an IMF loan.

But after falling more than a dollar a barrel, Brent and U.S. crude bounced back to positive territory before heading lower again.

"The dollar and the OPEC decision are both pulling the market opposite ways," said Phil Flynn, analyst at the Price Futures Group in Chicago.

"The jobs report just blew away expectations and set the dollar on an unexpected run that tore into oil's gains. But at the same time, bulls were already hedged for the OPEC decision not to cut output and ready for a relief rally after the losses of the past two days."

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A London-based broker also cited technical reasons for the market choppiness.

"$60.95 was a key number on the daily Brent chart," the broker said, explaining the rebound that followed the seven-week low in Brent.

With oil having rebounded by more than a third from Brent's six-year low of $45 in January, OPEC officials seemed pleased with a strategy that has revived world consumption and dampened the U.S. shale boom.