New York, United States – Oil prices saw a modest 2% increase on Friday, boosted by Iraq’s expressed support for OPEC+’s ongoing oil production cuts in the lead-up to an upcoming meeting. This positive sentiment, coupled with speculators covering short positions ahead of the weekend, contributed to the uptick. However, despite Friday’s gains, prices concluded the week with a 4% loss, marking the third consecutive weekly decline.
The market witnessed substantial short covering as the week unfolded, partly fueled by Iraq’s commitment to OPEC+’s production level agreements. Reassurances from Saudi Arabia and Russia about extending oil output cuts through the end of the year played a role in stabilizing the market.
Brent futures rose by $1.42, or 1.8%, settling at $81.43 a barrel, while US West Texas Intermediate (WTI) crude increased by $1.43, or 1.9%, settling at $77.17. Despite the gains on Friday, both benchmarks posted their third consecutive weekly losses, a situation not seen since May. Notably, however, both Brent and WTI exited technically oversold territory.
Market analysts highlighted concerns about weakening demand, citing weak Chinese economic data and a decrease in crude supply requests from Chinese refiners in December. Additionally, US consumer sentiment declined for a fourth straight month in November, while expectations for inflation rose.
Looking ahead, OPEC+ is scheduled to meet on November 26, where discussions on production levels and potential supply adjustments will take center stage. Iraq’s oil ministry affirmed its commitment to the OPEC+ agreement, and there is speculation that Saudi Arabia might extend its output cut into the first quarter of 2024 amid renewed concerns about Chinese demand and broader economic outlook.
