US oil settles at $53.33 a barrel, up 72 cents, rebounding from recent weakness

An oil pumpjack operates near Williston, North Dakota.
Andrew Cullen | Reuters

Oil prices surged on Friday, as a weaker dollar encouraged buying but investors remained cautious after Russian production figures showed weak compliance with a global deal to cut output.

Global benchmark Brent rose 79 cents to $55.87 a barrel at 2:30 p.m. ET (1930 GMT), recovering some of Thursday's losses. WTI futures settled at 72 cents to $53.33 a barrel, a 1 percent gain.

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"There is nothing surprising in seeing fresh buying after a big sell-off and of course the slightly weaker dollar is also helping oil recover," said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.

Both benchmarks have traded in a tight range all year. U.S. crude's peak this year was $55.24 on the first trading day of 2017; its low was $50.71 later in January.

Oil barely budged after a speech by U.S. Federal Reserve Chair Janet Yellen. The dollar was down 0.3 percent on Friday, barely changed from prior to her statement which suggested a rate increase would come at the close of its two-day meeting on March 15.

U.S. drillers added rigs for the seventh straight week, Baker Hughes said on Friday. Rig counts rose by seven rigs to bring the total to 609, most since October 2015, the energy services company said.

"For the large part an interest-rate hike in the near-term is probably already valued into the dollar," said Sarp Ozkan, DrillingInfo's manager of energy analytics.

Dollar strength tends to pressure oil prices, as global trade in petroleum is conducted in dollars.

Oil's gains were capped by lingering concerns over compliance, by producers outside the Organization of the Petroleum Exporting Countries, with a global deal to rein in oversupply.

Russia's February oil output was unchanged from January at 11.11 million barrels per day (bpd), energy ministry data showed, with cuts from October 2016 levels remaining at 100,00 bpd, or a third of what Moscow pledged in its agreement with OPEC.

Official U.S. data also showed crude inventories in the world's biggest oil consumer rose for an eighth straight week to a record 520.2 million barrels.

Still, OPEC boosted already strong compliance with the group's six-month deal to 94 percent, cutting output for a second month in February, a Reuters survey found.

In a bid to maintain demand for its oil, world top exporter Saudi Arabia has cut the price for its April light crude deliveries to Asia, trade sources told Reuters.