Oil futures reversed earlier loses on Friday after OPEC sources said the producer group expected limited U.S. oil output growth this year despite rising prices.
Officials at the Organization of the Petroleum Exporting Countries got the U.S. production outlook from industry experts, OPEC sources said. This would give the producer group more power to manage the market in the short term before a potential surge in shale output in 2022.
Brent crude futures rose 39 cents, or 0.53% to $73.47 a barrel by 2:53 p.m. ET.
U.S. West Texas Intermediate (WTI) crude futures settled at $71.64 per barrel, up 0.8%.
On Wednesday, Brent settled at its highest price since April 2019 and WTI closed at its highest since October 2018. But gains were capped by lingering concerns about the COVID-19 virus and a stronger U.S. dollar, which makes oil more expensive in other currencies.
Both benchmarks were on track for a weekly gain of about 1%.
"Oil markets are rallying because OPEC is skeptical that the increase in U.S. oil production is going to be enough to change their plans to support prices," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Sources told Reuters that on Tuesday, officials from OPEC's Economic Commission Board (ECB) and external presenters attended a meeting focused on U.S. output. OPEC heard from more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday.
While there was general agreement on limited U.S. supply growth this year, an industry source said for 2022 forecasts ranged from growth of between 500,000 and 1.3 million barrels per day.
"The general sentiment regarding shale was it will come back as prices go up but not super fast," said a source at one of the companies that provided forecasts to OPEC.
Higher oil prices have spurred some U.S. energy firms back to the well pad. The oil rig count, an early indicator of future output, rose eight this week to 373, the highest since April 2020, according to energy services firm Baker Hughes Co said.
Adding to market worries were remarks from Iran's top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.