SCI Service Corp International Inc

By Justin Yang and Jenny W. Hsu 

Oil prices ticked higher Friday, hitting a two-month high ahead of a key reading on U.S. production activity.

Brent crude, the global oil benchmark, rose 0.06% to $51.55 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.08% at $49.08 a barrel.

Analysts say the weekly report on U.S. oil-rig activity due later Friday will be an important factor in determining how producers there are coping with prolonged soft prices. A further drop in the active oil-drilling rig count could offer a short-term lift to prices, said a note from ING Bank.

"What we will be looking for is if the growth has plateaued," said Gao Jian, an energy analyst at Shandong-based SCI International.

Crude is up more than 6% week-to-date on a raft of positive U.S. data points and a renewed commitment from the Organization of the Petroleum Exporting Countries to rein in production and exports. But doubts on whether oil can sustain its recent price increases persist.

Saudi Arabia could be challenged to maintain its promised export cuts after the region's own high-demand summer season ends and there is more crude available to export in the autumn, said Commerzbank in a note.

"We consider the current prices a bit high today, ahead of the fundamentals. We expect prices to lower over the next weeks," said Eugen Weinberg, head of commodity research at Commerzbank.

Nymex reformulated gasoline blendstock--the benchmark gasoline contract--rose 0.01% to $1.62 a gallon. ICE gas oil changed hands at $477.00 a metric ton, up/down $1.75 from the previous settlement.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

July 28, 2017 06:45 ET (10:45 GMT)

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