Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Crude Oil Bounces; U.S. Output Gain Seen Limited

Published 06/18/2021, 09:51 AM
Updated 06/18/2021, 09:52 AM
© Reuters.

© Reuters.

By Peter Nurse   

Investing.com -- Crude oil prices gained Friday, rebounding after the weaker tone following the Federal Reserve meeting after a report suggested additional U.S, supply this year would be limited..

By 9:55 AM ET (1355 GMT), U.S. crude was up 0.7% at $71.50 a barrel, while Brent was up 0.1% at $73.16. On Wednesday, Brent settled at its highest price since April 2019, while WTI settled at its highest since October 2018.

U.S. Gasoline RBOB Futures were up 0.3% at $2.1400 a gallon.

Earlier Friday, OPEC officials received information that indicated U.S. oil output growth will likely remain limited in 2021 despite rising prices, Reuters reported. citing OPEC sources.

U.S. shale oil output usually responds rapidly to price signals, but American producers are still focusing on capital discipline and investor returns, rather than expanding supply, OPEC heard.

This discipline may not last long, with U.S. shale producers expected to lift output by between 500,000 and 1.3 million barrels a day in 2022, but for now the cartel should be able to manage the market in the short term.

This news helped the market bounce after weakness following the hawkish view the Federal Reserve took after its latest two-day meeting earlier this week, which boosted the U.S. dollar.

At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% higher at 92.172, climbing to levels not seen since mid-April. The index is on course for a weekly gain of 1.8%, its largest since September.

A stronger dollar makes oil, priced in the U.S. currency, more expensive in other currencies, potentially weighing on demand. The strong gains in the greenback also provided traders with an excuse to take profit with the two benchmark crude contracts both up over 40% year to date. 

Later Friday, traders will focus on the latest weekly update from Baker Hughes of the number of oil rigs for more news about U.S. supply, while the CFTC will release its weekly commitments of traders report.

 

Latest comments

a quanta of light, landing on a dark Planet. Tic-toc.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.