Oil futures reversed losses in early US trading on Friday (8 July) after data revealed that production stateside had fallen to its lowest level in over three years.
Preliminary weekly data from the US Energy Information Administration (EIA) showed the country's oil production fell by 194,000 barrels per day (bpd) over the previous week to 8.428m bpd, primarily due to declines in Alaska's output.
The data nominally reversed declines seen over much of the trading week as the weekend approached. At 3:00pm BST, the Brent front month futures contract was up 1.1% or 53 cents to $46.93 per barrel, while the West Texas Intermediate rose 0.9% or 51 cents to $45.65 per barrel.
In a note to clients, Mike Wittner, head of oil market research at Societe Generale, said: "Steadily declining US crude production continues to underpin our view that the global market has shifted from massive oversupply to broadly balanced in the second half."
Additionally, market consensus suggests OPEC exporters have been triggering a rise in oil exports led by Iran and Iraq. But many of the cartel's members will not reverse their fiscal misfortune brought on by the oil price decline anytime soon, according to Abhishek Deshpande, chief energy analyst at Natixis.
"We see oil prices rising in the medium-term due to large capital expenditure cuts made in the last two years globally in oil upstream, and believe the oil states could start building their foreign reserves once again in a few years' time. However it is the time between now and the price recovery that could be critical for a few weaker oil states such as Libya, Venezuela, Nigeria and even Algeria," Deshpande added.
Meanwhile, gold prices continued to head lower with the yellow metal's Comex futures contract for August down 0.55% or $7.50 to $1,354.60 an ounce at 3:53pm BST, as the US dollar rose following the publication of impressive US nonfarm payrolls (NFP) data for June.
In a scheduled data release, the country's Department of Labor said June US non-farm payrolls increased by 287,000, marginally raising the likelihood of an interest rate hike later this year by the Federal Reserve. The sentiment weighed on gold as traders looked to cash in on earlier gains.
FXTM research analyst Lukman Otunuga said: "Although the persistent post-Brexit uncertainty has mixed with the toxic cocktail of events which have increasingly made it hard for the Fed to take action, the repeatedly improved domestic data has offered a glimmer of hope for the central to bank to take action."
Elsewhere in the precious metals market, silver futures performed better rising 0.31% or six cents to $19.90 an ounce but spot platinum fell 0.32% or $3.44 to $1086.71 an ounce.