Oil prices rose Friday on reports that Iran is preparing a retaliatory strike on Israel from Iraq in the coming days, but record U.S. output weighed on prices.
Brent futures rose 29 cents, or 0.4%, to $73.10 a barrel. WTI crude rose 23 cents, or 0.3%, to $69.49. Both indexes were up more than $2 a barrel at session highs.
Brent fell nearly 4% for the week, while WTI fell nearly 3%.
Iran supports several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza, and the Houthis in Yemen.
Iran and Israel have launched a series of retaliatory strikes as part of the broader Middle East war that began with the conflict in Gaza. Any response from Iran could be limited, similar to the limited attack carried out by Israel last weekend, and thus more of a show of force than an open call to war.
The member of the Petroleum Exporting Countries (OPEC) Iran, is expected to produce about 4 million barrels per day (bpd) of oil in 2023, according to data from the U.S. Energy Information Administration.
Iran was on track to export about 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and U.S. government reports.
Oil prices were also supported by expectations that OPEC+ could delay its December oil production by a month or more. A decision could be made as early as next week.
While OPEC+ has cut production, U.S. oil giant Exxon Mobil said its global output had reached an all-time high and Chevron said U.S. output had reached a record high.
The U.S. Energy Information Administration (EIA) said this week that drillers extracted a record 13.5 million barrels of oil per day (bpd). The EIA also said this week that August production reached a record 13.4 million bpd, and that annual production is on track to reach a record 13.2 million bpd in 2024 and 13.5 million bpd in 2025.
U.S. job growth nearly stalled in October as labor strikes in the U.S. air transportation sector slashed manufacturing employment, while hurricanes hurt the response rate for the payroll survey, making it difficult to get a clear picture of the labor market ahead of next week’s presidential election.
Polls show the U.S. presidential race is tightly contested between Democratic Vice President Kamala Harris and Republican former President Donald Trump as the country’s next president.
The Fed began cutting interest rates in September after aggressively raising interest rates in 2022 and 2023 to control rising inflation.
Economists said they expect the U.S. Federal Reserve to cut interest rates by 25 basis points next Thursday.
Lower interest rates could lower borrowing costs, boosting economic growth and oil demand.
