Oil prices rose on Friday, continuing to rise after OPEC+ members Saudi Arabia and Russia signaled a willingness to suspend or reverse production deals and an interest rate cut in Europe raised the prospect of a similar move by the United States.
Brent crude futures rose 16 cents or 0.2% to $80.03 a barrel and U.S. West Texas Intermediate crude futures rose 16 cents or 0.2% to $75.71 at 0007 GMT.
Prices rose on Thursday as Saudi Arabia and Russia sought to reassure markets about supply deals. However, they are heading for a weekly loss after analysts saw Sunday’s OPEC+ meeting as a sign of rising supply, bearish for prices.
OPEC+, the Organization of the Petroleum Exporting Countries and its allies including Russia, agreed to extend most production cuts until 2025, but left room for eight members’ voluntary cuts, which will be phased in gradually. eliminated.
Attending an event in Russia on Thursday alongside Russian Deputy Prime Minister Alexander Novak, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ can pause or cancel voluntary production increases if it decides the market is not strong enough.
“We are ready to react quickly to market uncertainties,” Novak said at the event, adding that the drop in prices after the weekend meeting was caused by a misinterpretation of the agreement and “speculative factors.”
Jarand Rystad, founder and chief executive of consultancy Rystad Energy, told Reuters that OPEC+ would likely continue to manage the market, but “further cuts may be needed as demand softens slightly, while supply remains sufficient, unless changes are made.”
“The strength of OPEC+ is within the price range we have seen: the 1980s to the 1970s (in US dollars per barrel). Although some Russian volumes have been cut from the market due to sanctions and drone strikes, the impact remains manageable,” he said.
The European Central Bank proceeded with its first interest rate cut since 2019 on Thursday, leading analysts to expect the U.S. Federal Reserve to follow suit. Lower rates stimulate oil demand.
Market participants will await the release of Chinese commodity trading data on Friday for an indication of the direction of demand in the world’s second-biggest oil consumer after the United States, analysts at ANZ Research wrote in a note for the customers. (Reporting by Katya Golubkova; Editing by Christopher Cushing)
