Oil climbs 2% but still headed for weekly drop
OPEC+, have had difficulty raising output as under-investment or maintenance delays persist from the pandemic. PHOTO: REUTERS
Oil prices were on track for a seventh consecutive weekly decline for the first time in half a decade on Friday on concerns about surplus supply, but prices rose on the day after Saudi Arabia and Russia lobbied OPEC+ members to join output cuts.
Brent crude futures were up $1.71, or 2.3%, at $75.76 a barrel at 1704 GMT, while US West Texas Intermediate (WTI) crude futures were up $1.75, or 2.5%, at $70.67 a barrel.
Offering some support, data showed US consumer sentiment perked up much more than expected in December, a development likely to be welcomed by Federal Reserve officials.
Meanwhile, Saudi Arabia and Russia, the world’s two biggest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts just days after a fractious meeting of the producers’ club.
Read: Russia and Saudi Arabia urge all OPEC+ powers to join oil cuts
The Organiaation of the Petroleum Exporting Countries and its allies last week agreed to a combined 2.2 million barrels per day (bpd) in output cuts for the first quarter of next year. The market has been concerned, however, that some members may not adhere to their commitments.
Friday’s price gains could be a sign that the market has found a floor for now after falling for six straight sessions, said Phil Flynn, analyst at Price Futures Group. “Look to step in with caution but the lows should be in,” he said.
Brent and WTI crude futures slid to their lowest since late June on Thursday, a sign that many traders believe the market is oversupplied. Brent is on track to fall 3.9% this week and WTI 4.2%, the biggest weekly losses in five weeks.
Published in The Express Tribune, December 9th, 2023.
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