Commodities
Oil prices jump, but can’t avert fourth-straight weekly loss; OPEC meeting eyed
© Reuters.
Investing.com — Oil prices staged a rally Friday, but that proved too little too late to avert a fourth-weekly slump as as growing global supply and cooling demand worries muddy sentiment ahead of the OPEC meeting next week.
By 14:30 ET (19:30 GMT), the futures rose 4.1% to settle at $75.89 a barrel, while the contract climbed 3.9% to $80.47 a barrel.
Both contracts are on course for losses of around 4% this week, on track for their fourth straight week of losses, with the benchmarks having lost around a sixth of their value over the last four weeks.
U.S. inventories point to rising supplies
Oil prices have perked up Friday, a day after sinking 5% to a four month-low, mainly triggered by a bigger-than-expected build in U.S. oil , coupled with record-high production levels, stoking concerns about oversupply.
“It has become clearer that the oil balance for the remainder of this year is not as tight as initially expected,” said analysts at ING in a note. “Higher-than-expected supply has eroded a large amount of the expected deficit over 4Q23. And as things stand, the market is still expected to return to surplus in 1Q24.”
Additionally, easing concerns over the Israel-Hamas war weighed, as traders priced in a smaller risk premium from the conflict after it proved to have little impact on Middle Eastern supplies.
Baker Hughes rig count rises; CFTC data eyed
Oilfield services firm Baker Hughes Co (NYSE:BKR) reported its weekly U.S. rig count rose to 500 from 494.
slated for release later in the day will also come in focus following data last week showing traders reined in their bullish bets on oil for a sixth-straight week.
OPEC meeting looms large
Focus is now squarely on an upcoming on Nov. 26, where traders will be looking to see if Saudi Arabia, principally, and Russia roll over their voluntary supply cuts into 2024.
The two recently vowed to maintain their cuts until the end of 2023, with many now expected that the Saudis will likely extend cuts of 1 million barrels of oil per day to offset an expected supply surprise.
“On the balance of risks, we think Saudi Arabia will extend its production cuts into 2024 if they want prices to remain above USD80/bbl,” ANZ Research said in a note.
(Peter Nurse and Ambar Warrick contributed to this article.)
(Reuters) – Goldman Sachs adjusted its expectations for OPEC+ oil production saying it now expects three months of production increases starting from December instead of October, the bank said in a note on Friday.
OPEC+ has agreed to delay a planned oil output increase for October and November, the producers group said on Thursday after crude prices hit their lowest in nine months, adding it could further pause or reverse the hikes if needed.
However Goldman Sachs maintained its range of $70-85 per barrel and a December 2025 Brent forecast at $74 per barrel.
The investment bank expects the effects of a modest reduction in OPEC+ supply in the upcoming months to be counterbalanced by easing effects from the current softness in China’s demand and faster-than-expected recovery of Libya’s supply.
“We still see the risks to our $70-85 range as skewed to the downside given high spare capacity, and downside risks to demand from weakness in China and potential trade tensions,” Goldman Sachs said.
Brent crude futures were down $1.63, or 2.24%, to $71.06 a barrel on Friday, their lowest level since December 2021. U.S. West Texas Intermediate crude futures fell $1.48 on Friday, or 2.14%, to $67.67, their lowest since June 2023. [O/R]
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
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