US oil settles up 1.8%, at $45.54 a barrel

Gas is flared off at an oil well site outside Williston, N.D.
Andrew Burton I Getty Images

Crude prices erased early losses to rise nearly 2 percent on Friday after a report showing the fifth weekly decline in the U.S. oil rig count renewed the debate over falling production in the world's top oil consumer.

Softer-than-expected U.S. jobs data and other economic statistics had weighed on oil earlier, along with reduced threats to oil installations in the U.S. East Coast from Hurricane Joaquin.

U.S. energy companies this week cut the number of rigs drilling for oil by 26, a weekly survey by oil services company Baker Hughes showed. It was the largest number of rigs idled in a week since April.

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The data turned around oil prices that had been down about 1 percent earlier.

U.S. crude closed up up 1.8 percent, at $45.54 a barrel. It had slid 77 cents at the session low. Global benchmark Brent was up 50 cents, or 1 percent, at $48.90 a barrel, after falling as much as 76 cents earlier.

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Oil prices were still down on the week, though, with Brent down 1 percent and U.S. crude off 0.6 percent.

The Baker Hughes data showed drillers reduced the number of oil wells in all of the nation's major shale basins this week, cutting seven in the Permian in West Texas and eastern New Mexico, five in the Eagle Ford in South Texas, two in the Niobrara in Colorado and Wyoming, and one in the Bakken in North Dakota and Montana.

Despite drilling cutbacks, U.S. oil production edged up to 9.4 million barrels per day (bpd) in July from 9.3 million bpd in June, according to the latest U.S. Energy Information Administration's (EIA) 914 production report.

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Earlier data showed U.S. employers slammed the brakes on hiring over the last two months and wages fell in September. U.S. factories shed 9,000 jobs in September after losing 18,000 in August, according to the Labor Department's survey of employers.

Separately, U.S. factory orders fell 1.7 percent in August, data on Friday showed.

On the storm front, Hurricane Joaquin pounded the Bahamas for a second day with powerful winds and waves, but was not expected to be a major threat to the U.S. East Coast, the U.S. National Hurricane Center (NHC) said.

The U.S. East Coast is home to the New Jersey coast and New York Harbor, where several oil refineries, pipelines and other energy infrastructure are located.