Oil prices ticked higher on Friday, as reassurances from OPEC+ members Saudi Arabia and Russia indicating readiness to pause or reverse output agreements, but markets were headed for their third straight weekly losses.
Brent crude futures rose 2 cents to $79.89 per barrel and U.S. West Texas Intermediate crude futures rose 4 cents to $75.59 as at 0318 GMT.
“Oil prices managed to regain some ground over the past few days, tapping on some reassurances from OPEC+ around their latest supply decision,” said Yeap Jun Rong, market strategist at IG.
“We may expect oil prices to hover around the $76-$80 level, as sentiments attempt to stabilise while awaiting cues for the next step.”
Prices rallied on Thursday when Saudi Arabia and Russia tried to reassure markets on supply agreements. But they are set for a third straight week of declines after analysts saw Sunday’s OPEC+ meeting as indicating rising supply which is bearish for prices.
The Organization of the Petroleum Exporting Countries and allies including Russia agreed to extend most production cuts into 2025 but left room for voluntary cuts from eight members to be unwound gradually.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday OPEC+ can pause or reverse voluntary output increases if it decides the market is not strong enough.
“We are ready to react quickly to market uncertainties,” Novak said at the event, adding the price drop after the weekend meeting was caused by misinterpretation of the agreement and “speculative factors”.
Jarand Rystad, founder and CEO, Rystad Energy consultancy, told Reuters that OPEC+ would likely persist in managing the market but “further cuts may be necessary as demand softens slightly while the supply remains sufficient unless adjustments are made”.
“The sweet spot for OPEC+ lies within the price range we’ve witnessed – low 80s to high 70s (in U.S. dollars per barrel). Despite some Russian volumes being cut from the market due to sanctions and drone attacks, the impact remains manageable.”
The European Central Bank went ahead with its first interest rate cut since 2019 on Thursday, prompting analyst expectations of the U.S. Federal Reserve following the suit. Lower rates boost oil demand.
U.S. non-farm payrolls data for May, due at 1230 GMT on Friday, could shed more light on the timing of the Fed’s rate cuts this year.
China, the world’s biggest crude importer, imported 46.97 million metric tons of crude oil in May, official data from customs showed on Friday.
