Oil prices tumbled more than 2 percent on Friday, marking the biggest weekly drop in a month, on renewed concerns that increasing U.S. production and high inventories will thwart OPEC's attempts to reduce the global crude glut.
U.S. crude futures fell below $50 a barrel for the first time in two weeks, with volumes picking up in an active session that by late afternoon showed more than 560,000 front-month contracts changing hands, more than the daily average.
U.S. crude futures, which rolled over on Friday, settled at $49.62 a barrel, down $1.09, or 2.2 percent. For the week, it was down 6.7 percent, its steepest drop since the week of March 10.
Brent futures were down $1.05, or 2 percent, at $51.94 a barrel by 2:38 p.m. (1838 GMT), on pace for a roughly 7 percent weekly decline.
Saudi Arabia and Kuwait, key members of the Organization of the Petroleum Exporting Countries, favor extending their production-limiting deal with non-member producers into the second half of the year.
An OPEC and non-OPEC technical committee recommended that producers extend a global deal to cut oil supplies for another six months from June, a source familiar with the matter said, in an effort to clear a glut of crude that has weighed on prices.
Russia's Energy Minister Alexander Novak, however, declined to say whether the top oil producer would adhere to an extension before a joint meeting on May 25, saying global stocks were declining.
On May 25 OPEC and non-OPEC members will decide whether to extend cuts of almost 1.8 million barrels per day (bpd). Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB, does not expect OPEC to roll over its cuts, saying it could potentially leave the cartel vulnerable to "more stimulus of the U.S. shale oil sector."
U.S. production, already at its highest since August 2015, looks to keep rising, as U.S. drillers added rigs for a 14th consecutive week, Baker Hughes said on Friday.
Prices in the $40s are not as much an issue for U.S. producers that have hedged," said Anthony Headrick, energy market analyst at CHS Hedging. "Conversely, its a concern for OPEC in terms of what they want that price to be.
The Relative Strength Index (RSI), which measures momentum in asset pricing, fell below 30 for both oil benchmarks for the first time in almost a month, suggesting an oversold market.
On Sunday France holds the first round of its presidential election, where the race has been tight. Robert Yawger, director of energy futures at Mizuho Americas, said this uncertainty colors the oil market, even though France is not an oil producer.
"I would say its a situation where the spec community is not willing to ride that long position into the weekend and the French election," he said.
Thomson Reuters Eikon data shows that a record 48 million bpd of crude is being shipped across ocean waters in April, up 5.8 percent since December.
The market is taking note: The value of the Brent forward curve has slumped steadily since the start of the OPEC-led cuts in January. The two-year calendar strip for Brent futures, or the average value of all contracts over that period, is down more than $4 since January at around $54.10 a barrel.
Demand for crude oil is however set to rise in the coming weeks as refineries around the world return from seasonal maintenance ahead of peak summer demand.
Also supporting the market, exports from OPEC member Iran, which was exempt from the cuts, are set to hit a 14-month low in May, suggesting the country is struggling to raise exports after clearing out stocks stored on tankers.
Other producers that are not involved in the supply-curbing pact have increased exports. U.S. output has jumped almost 10 percent since mid-2016 to 9.25 million bpd, close to that of the world's top two producers, Saudi Arabia and Russia.
— CNBC's Tom DiChristopher contributed to this report.