Oil prices fell in volatile trade on Friday, but recorded its first weekly gain in five weeks on Friday, supported by the possibility of OPEC+ agreeing to cut crude production at its October 5 meeting.
November Brent crude futures, which expire on Friday, fell 53 cents, or 0.6%, to $87.96 a barrel. The more active December contract fell $2.07 to $85.11.
West Texas Intermediate (WTI) crude futures fell $1.74, or 2.1%, to $79.49.
On Friday, both contracts rose more than $1 during the session but fell on news that OPEC’s oil production rose to its highest level since 2020 in September.Some profits were made from the gains seen earlier in the week. $80 is seen as a kind of pivot point these days.
Growing concerns about financial stability in the UK are undermining the demand outlook.
Brent and WTI posted 2% and 1% weekly gains, posting their first weekly gains since August, following the nine-month lows they’ve seen this week.
Brent and WTI prices closed the third quarter with big decreases of 23% and 25% respectively.
The U.S. Commodity Futures Trading Commission (CFTC) said money managers cut their net long U.S. crude futures and options positions during the week of September 27.
The dollar rallied throughout the day after falling from a 20-year high at the start of the week. A strong dollar makes dollar-denominated oil more expensive for buyers who hold other currencies, reducing demand for the commodity.
Price volatility has become commonplace as market players counterbalance concerns about the global economy and the possibility of tightening oil supplies.
Analysts expect production cuts as fears of a possible global economic slowdown and demand related to rising interest rates weigh on crude oil prices.
The market was supported by the fact that the Organization of the Petroleum Exporting Countries (OPEC) and its allies considered cutting production quotas by 500,000 to 1 million barrels per day (bpd) at the October 5 meeting.
But despite the worsening crude demand outlook, energy traders won’t let oil rise until they are confident OPEC+ will cut production.
U.S. energy companies added two oil rigs for the third week in a row this week, but third-quarter growth slowed amid recession fears and troubling supply shortages.
President Joe Biden warns the industry about the price, while senior White House officials will meet with oil executives on Friday to discuss Hurricane Ian and low gasoline inventories, according to two sources familiar with the matter.
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