By Timothy Puko 

Oil's rally fell flat with a late-week selloff canceling out early-week gains after new questions emerged about OPEC's ability to hold to its promise of output cuts.

Light, sweet crude for September delivery settled down $1.15, or 2.5%, at $45.77 a barrel on the New York Mercantile Exchange. Brent crude, the global benchmark, lost $1.24, or 2.5%, to $48.06 a barrel on ICE Futures Europe. Both had their seventh-lowest settlement of the year.

Both also lost ground for the seventh time in the last nine weeks. U.S. oil fell 98 cents, or 2.1% a barrel this week. Brent lost 85 cents, or 1.7%.

Prices turned south Friday in early-morning trading after further confirmation of rising supply from the Organization of the Petroleum Exporting Countries, brokers said. OPEC output rose above 33 million barrels a day in this month, up 145,000 barrels a day from a month ago, tanker tracking firm Petro-Logistics said.

"We're getting back to this idea that the market may not rebalance as thought," said Bart Melek, head of commodity strategy at TD Securities in Toronto.

The data aren't far from what has already been reported. The International Energy Agency said last week that OPEC crude output was rising to its highest level in 2017 at 32.6 million barrels a day, driven by Libya, Nigeria and Saudi Arabia.

But any prospect for more OPEC supply increases can shake a market in which a rally was already looking fragile, brokers and analysts said. That rally includes U.S. oil's longest winning streak in seven years, but has stalled late this week as it bumped up against six-week highs, a signal to some momentum-based traders that oil's next move is a retreat.

OPEC has tried to ease a longstanding glut and boost prices with a pact to cut output this year, but it hasn't pushed futures to the $60 mark that many expected. Now traders are becoming leery again of rising production from several sources globally, including countries that were supposed to be part of OPEC's output cuts.

"The silent fear now is that the OPEC deal could really start to unravel, " said Bill Baruch, chief market strategist at Chicago brokerage iiTrader.

OPEC officials are about to start meetings in Russia this weekend with counterparts from non-OPEC countries that have participated in this year's output cuts. Delegates are supposed to discuss the possibility of including two previously exempted OPEC members, Nigeria and Libya, into the deal. But traders are becoming skeptical that meetings will produce any significant changes.

"I don't think they're going to agree to a damn thing. They're trying to get their output higher," Tariq Zahir, managing member of Tyche Capital Advisors LLC, said about Libya and Nigeria. "You really have to get some proof supply is coming off the market" for the rally to keep going.

Gasoline futures lost 4.29 cents, or 2.7%, to $1.5633 a gallon. They gained 0.28 cents, or 0.2%, for the week.

Diesel futures lost 2.84 cents, or 1.8%, to $1.5152 a gallon. They gained 0.02 cent, or 0.01%, for the week.

--Sarah McFarlane contributed to this article.

Write to Timothy Puko at tim.puko@wsj.com

(END) Dow Jones Newswires

July 21, 2017 16:28 ET (20:28 GMT)