Oil prices extend rally for weekly gain of more than 4 percent

May 12 (UPI) -- Optimism that some of the glut of oil could be evaporating gave crude oil prices more support Friday, though U.S. economic data could drag on momentum.

Crude oil prices recovered ground lost in April over the span of a few days this week amid signs that an oversupplied market was balancing out. Data this week from the U.S. Energy Information Administration supported emerging sentiments on balance by way of a sizeable drag on crude oil inventories.

Bullish sentiment is supported, meanwhile, by signs that parties to an agreement led by the Organization of Petroleum Exporting Countries to balance the market through managed production declines will extend the arrangement for at least six more months when they meet later this month.

During meetings with officials from Equatorial Guinea, the government of Saudi Arabia said both sides were in favor of an extension for six months "or more."

The price for Brent crude oil was up modestly in early Friday trading, moving up 0.6 percent from the previous close to $51.06 per barrel about a half hour before the opening bell in New York. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.25 percent to $47.95 per barrel.

Brent crude oil prices are up about 4.5 percent from early Monday.

Friday's gains may be tested later in the morning when Baker Hughes releases weekly figures on exploration and production. Reported as rig counts, the numbers offer a loose indication for spending by energy companies and gains, especially for North America, could drag on the emerging bullish sentiment.

Stephen Brennock with London brokerage firm PVM said in a statement that, despite OPEC commitments, there's not much physical evidence to support a global rebalancing.

"Despite solid compliance to output cuts, several OPEC members have maintained crude allocations to customers," he said in a daily emailed newsletter. "This is in contrast to the group's de facto leader [Saudi Arabia] which has lead from the front in slashing crude exports."

Elsewhere, U.S. consumer prices rebounded in April to post a seasonally adjusted gain of 0.2 percent, after a 0.3 percent decline the previous month. Year-over-year, energy prices are up 9.3 percent, while costs for medical care services are up 3.1 percent.

That data could influence decisions from the U.S. Federal Reserve, which is looking for stronger gauges of inflation as a sign of a healthy economy. In late April, the U.S. Commerce Department reported gross domestic product grew 0.7 percent in the first quarter, after a 2.1 percent gain in the fourth quarter, for the slowest quarterly performance in three years.

Hourly average earnings for all U.S. employees increased 0.1 percent from March to April, the U.S. Bureau of Labor Statistics reported. U.S. workers, meanwhile, extended their workweek by 0.3 percent year-over-year.