Oil Prices Edge Up on OPEC+ Output Cut Prospect
In the bustling city of New York, oil prices saw a slight uptick on Friday amidst the possibility of OPEC+ extending output cuts. However, the crude benchmarks were on track for their most significant weekly losses in three months due to uncertainty in demand and easing tensions in the Middle East reducing supply risks.
Brent crude futures for July inched up by 14 cents to reach $83.82 a barrel by 0646 GMT. Meanwhile, US West Texas Intermediate crude for June saw a 16 cents increase, or 0.2 percent, reaching $79.11 per barrel.
Despite the small gains, both benchmarks were facing weekly losses as concerns grew over the potential impact of sustained high interest rates on growth in the US, the top global oil consumer, and other regions around the world.
Analysts at ANZ Research commented, “With the US driving season almost upon us, high inflation may see consumers opt for shorter drives over the holiday period.”
Market attention has shifted towards US economic data and signs of future crude supply from the leading producer in the world.
The US Federal Reserve maintained steady interest rates this week, highlighting recent worrying high inflation figures that could delay any rate cuts in the near future.
Geopolitical tensions stemming from the Israel-Hamas conflict, which had previously driven prices up due to global supply risks, have started to diminish. Israel and Hamas are considering a temporary ceasefire and engaging in discussions with international mediators.
Brent was on course for a 6.3 percent weekly decline, while WTI was moving towards a 5.6 percent loss for the week.
This drop comes just ahead of the upcoming meeting of OPEC+ countries led by Russia and OPEC. Sources from OPEC+ producers indicated that the group might prolong its voluntary oil output cuts of 2.2 million barrels per day beyond June if oil demand does not show signs of improvement. However, formal discussions have yet to commence ahead of the June 1 meeting.