By Barani Krishnan
Investing.com - Oil bulls saw their multi-week win on Brent come to a close but still managed to deny bears joy over U.S. crude, which finished up on the day and just a little lower than a week earlier.
With producer group OPEC+ gearing to talk the market up again at its monthly meeting next Thursday, there is only so much room for crude prices to correct in an environment where traders are perpetually reminded of the cartel’s attempt to keep supplies abysmally low against demand.
In a pre-meeting holler, Algeria said on Thursday that crude output should not increase by more than the 400,000 barrels per day that the Organization of the Petroleum Exporting Countries and their allies had agreed to months ago. Energy experts say the total addition of 2 million barrels planned by OPEC between November and April is akin to a drop in the bucket for a market needing at least a million barrels more each month.
“The oil market deficit might only be 300,000 barrels a day this quarter, but the risks of a demand surge remain elevated,” said Ed Moya, head of research for the Americas at online trading platform OANDA.
Stephen Brennock, oil broker at PVM, concurred, telling Reuters that OPEC+ is “intent on continuing to act as a key pillar of price support” with its strangle power over supply.
London-traded Brent, the global benchmark for oil, finished Friday’s trading up 6 cents, or 0.07%, at $84.38. For the week though, Brent fell $1.15, or 1.3%. It was Brent’s first week in the negative after seven straight weeks of wins. Brent, however, still rose 7.5% on the month and is up around 61% on the year.
U.S. West Texas Intermediate crude settled up 76 cents, or 0.9%, on the day at $83.57 per barrel. That made WTI take a nominal loss of 19 cents, or 0.2%, on the week. For the month, WTI was still up 11% while rising 72% on the year.
Crude prices fell earlier in the week on the possibility of Iran holding nuclear talks with Western powers amid Tehran’s bid to free itself from U.S. sanctions prohibiting the sales of its oil to the world.
A weekly build in U.S. crude stockpiles also weighed on the market as the Energy Information Administration reported an inventory level double to market expectations. The rise came as refiners boosted raw oil imports last week to make more products like gasoline and diesel, while exporters of crude shipped out less.