Oil is headed for its biggest weekly gain in a month as the OPEC+ coalition’s supply cuts and a reported output halt at the world’s biggest offshore field overshadowed renewed concern over the U.S.-China trade war.
Brent for April settlement climbed 17 cents to $64.74 a barrel, near the highest level since November, on the London-based ICE Futures Europe exchange. It gained 4.2 percent for the week. The global benchmark crude was at a $9.89 premium to WTI for the same month.
West Texas Intermediate for March delivery rose 5 cents to $54.46 a barrel on the New York Mercantile Exchange at 7:45 a.m. in London. It advanced as much as 60 cents, or 1.1 percent, earlier, and is up $1.74 for the week.
Russia said it would accelerate output cuts agreed to in a deal with the OPEC+ coalition, while Saudi Arabia stopped production at the Safaniyah offshore field this week after an accident damaged the facility’s main power cable, Energy Intelligence Group reported. Asian stocks fell Friday as the U.S. and China were said to have made little progress in trade talks this week in Beijing.
Oil has resumed its rally this week — taking its advance this year to around 20 percent — as the Organization of Petroleum Exporting Countries and its allies reaffirmed their intention to cut production to bolster prices.
Sanctions on Iran and Venezuela are also limiting output and driving up prices of the world’s dirtier and heavier crudes. Still, record production and rising inventories in the U.S., together with prospects for weaker global growth, are capping gains.
“It’s a grim reality that a concern on demand exists, but investors are focusing more on the possibility supply will tighten,” said Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp. “While it will take some time before crude demand starts slowing down, supply from countries including Saudi Arabia, Venezuela and Russia has already begun falling.”
Venezuelan exports are facing an additional threat as the White House is considering blocking foreign entities from dealing with the country’s state oil giant Petroleos de Venezuela SA.
Bloomberg
