Oil prices closed with gains on Friday, but recorded losses for the week as investors await the OPEC+ meeting next week.
Particularly, the US WTI crude for October delivery It gained 26 cents, or 0.3%, to $86.87 a barrel, having earlier touched $89.66. On a weekly basis, it fell by 4.6%.
Alongside, Brent for November delivery It added 66 cents, or 0.7%, to $93.02 a barrel, down nearly 6.1% on the week.
Crude prices fell this week as traders reacted to another coronavirus lockdown in China, with authorities imposing a lockdown in Chengdu, a city of 21 million people. Concerns about the global economic outlook, as the US Federal Reserve (Fed) and other major central banks aggressively tighten monetary policy in an effort to rein in inflation, also weighed on oil prices.
Attention now turns to the OPEC+ meeting on Monday, when US markets will be closed for Labor Day.
The cartel has eased production cuts introduced since the outbreak of the pandemic in early 2020 and last month agreed to a modest output increase of 100,000 barrels per day for September, although surveys show output remains below target .
Saudi Arabia’s energy minister last month hinted at the prospect of output cuts, although analysts widely expect OPEC+ to hold back on Monday.
OPEC, the International Energy Agency and the U.S. Energy Information Administration have all forecast near-term oil surpluses, which likely explains Saudi Arabia’s talk of cutting, and while talks continue to revive the Iran nuclear deal that could see Tehran to resume crude exports, said Carsten Brzeski, commodities analyst at Commerzbank.
“That said, this is unlikely to happen any time soon. Nevertheless, producer countries will no doubt signal their willingness to adjust output at short notice if necessary and will therefore stick to their monthly meetings,” it said. Brzeski.
In the meantime, the finance ministers of the Group of Seven (G7) plan to impose a price ceiling on Russian oil and oil products, according to a joint statement on Friday.
“We’ve already had a very predictable response from the Kremlin, which has warned that Russia will stop selling oil to any country that supports a cap on Russian oil,” said Phil Flynn, senior market analyst at The Price Futures Group.
It is also noted that Gazprom today extended the shutdown of the Nord Stream 1 gas pipeline, due to a new technical problem. The pipeline was previously expected to reopen on Saturday.
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