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Oil prices post third weekly drop after volatile week

CommoditiesNov 12, 2021 03:37PM ET
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© Reuters. FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

By Stephanie Kelly

NEW YORK (Reuters) - Oil prices fell on Friday, wiping out gains from the previous session, on worries that the U.S. Federal Reserve will accelerate plans to boost interest rates to tame inflation.

Brent crude futures fell 70 cents, or 0.8%, to settle at $82.17 a barrel. U.S. West Texas Intermediate (WTI) crude fell 80 cents, or 1%, to settle at $80.79 a barrel.

Both benchmarks fell for a third consecutive week, hit by a strengthening dollar and speculation that President Joe Biden's administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices. On a weekly basis, Brent fell 0.7%, while WTI declined 0.6%.

"This week has been a good reminder for oil markets that prices are not only affected by the supply-demand trajectory, but also from monetary policy forecasts and by forms of government intervention," said Louise Dickson, senior oil markets analyst at Rystad Energy. "Higher interest rates would provide even further support to the dollar and even more downward pressure on oil prices."

U.S. Energy Secretary Jennifer Granholm said on Monday that Biden could act as soon as this week to address soaring gasoline prices.

"We believe that whatever the announcement is will only have a short-term impact on price, but because of the uncertainty the market is pulling back a little bit," said Phil Flynn, senior analyst at Price Futures Group.

U.S. energy firms this week added oil and natural gas rigs for a third week in a row. The oil and gas rig count, an early indicator of future output, rose six to 556 in the week to Nov. 12, its highest level since April 2020, energy services firm Baker Hughes Co said on Friday.

Russia's Rosneft the world's second-biggest oil company by output after Saudi Aramco (SE:2222), warned on Friday of a potential "super cycle" in global energy markets, raising the prospect of even higher prices as demand outstrips supply.

Still, though there are positive signs on the demand side, with air travel picking up rapidly, tighter monetary and fiscal policy and the looming Northern Hemisphere winter will act as a dampener.

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday cut its world oil demand forecast for the fourth quarter by 330,000 barrels per day (bpd) from last month's forecast as high energy prices hampered economic recovery from the COVID-19 pandemic.

OPEC, Russia and allies, together known as OPEC+, agreed last week to stick to plans to add 400,000 bpd to the market each month.

"The oil market is sleepwalking into a supply surplus," said Stephen Brennock of oil broker PVM. "OPEC and its allies will at the very least need to put a pause on the easing of their supply curbs in the new year. Inaction will result in global oil stocks swelling once again."

Oil prices post third weekly drop after volatile week
 

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Comments (3)
HotGaz Elviz
HotGaZ Nov 14, 2021 6:11PM ET
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High crude oil prices only increase pace of electric conversion, Golden era of Crude oil are coming to a rapid close, old energy associated with too much blood and bad politics to fill up your tank.
Alan Rice
Alan Rice Nov 14, 2021 3:04PM ET
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Get your (almost FREE) OIL, HERE !! ( before it is gone.)
Emmanuel Jabin
Emmanuel Jabin Nov 12, 2021 4:32AM ET
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Do these guys even look at the chart.. Even a blind person can see that the uptrend is still in place.. prices don't go up in a straight line, the do a bit of zigzag and then continue. the price is just retracing to H4 moving average and then from then more people will jump in and it will continue marching up to $100 per barrel..
AAKASH SHINDE
AAKASH SHINDE Nov 12, 2021 4:32AM ET
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for long term
Ac Tektrader
Ac Tektrader Nov 12, 2021 4:32AM ET
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maybe....the charts signals are right until there wrong...crude is subject to news.. if you're long, use stops. I have targets Of 99 dollars, but for now, I am not looking for a straight line move.
Alan Rice
Alan Rice Nov 12, 2021 4:32AM ET
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Em: ($400/bbl). Have a nice day.
 
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