U.S. oil prices rose for a third consecutive week as drilling continued to decline. The number of rigs drilling for crude in the U.S., which is viewed as a rough proxy for activity in the oil industry, dropped by eight in the past week to 392, the lowest level since 2009, oil-field-services company Baker Hughes Inc. said Friday. The combined number of oil and natural-gas rigs fell by 13 to 489, just above the record low of 488 rigs in 1999, according to Baker Hughes data starting in late 1948. "We're starting to see a lot of erosion in U.S. production," said Carl Larry, director of oil and gas at Frost & Sullivan. "We're inching our way back to $40." U.S. oil output has fallen from a peak in April as companies sharply cut spending on new drilling, but it hasn't declined as much as some investors expected because producers increased their efficiency and lowered drilling costs. Some analysts say U.S. production is due to drop more quickly this year because companies have announced new budget cuts in recent weeks. "You're on the path to getting a little bit more balance between supply and demand globally," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. "The factors are moving in place to begin to establish at least the lower [boundary] in oil prices." Light, sweet crude for April delivery settled up $1.35, or 3.9%, Friday at $35.92 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 5. Prices are up 37% from the 13-year low reached last month. For the week, U.S. crude was up 9.6%. Brent, the global benchmark, rose $1.65, or 4.5%, Friday to $38.72 a barrel on ICE Futures Europe, the highest close since Dec. 10. Prices are up 3.9% this year. Friday marked the first session in 2016 that Brent prices settled positive for the year to date. The global oil market remains oversupplied. U.S. inventories of crude oil rose more than expected in the week ended Feb. 26 and stand at the highest level in more than 80 years, according to the Energy Information Administration. Prices held their gains Friday after U.S. data showed stronger-than-expected jobs growth in February. Increased employment can add to oil demand, as more commuters drive to work. Talks among major producers, including Russia and members of the Organization of the Petroleum Countries, about freezing their output also have boosted prices in recent weeks. Emmanuel Ibe Kachikwu, Nigeria's oil minister, said Thursday that a meeting between OPEC and non-OPEC countries will take place on March 20 in Moscow to "fine-tune collaborative strategies," according to a statement from the Nigerian National Petroleum Corp. Iran, however, has indicated it won't join the freeze plan. Iran's production is expected to rise this year now that sanctions have been lifted, and market watchers say increased Iranian output could offset any decrease by other producers. Some analysts also are skeptical of the plan because some countries' January output levels were near record highs. Gasoline futures rose 3.33 cents, or 2.6%, Friday to $1.3321 a gallon, the highest level since Dec. 1. Prices rose 2.9% for the week. Diesel futures advanced 4.11 cents, or 3.7%, to $1.1613 a gallon, posting an 8.9% weekly gain.
