Oil prices rose 2% on Friday, posting weekly gains as it awaits OPEC+’s decision on supply deals for the second quarter and also assesses updated economic data from the United States, Europe, and China.
May Brent futures rose $1.64, or 2%, to $83.55 a barrel. The April Brent futures contract expired on February 29 at $83.62 per barrel.
WTI rose $1.71, or 2.19%, to $79.97 per barrel in April.
Weekly basis, Brent gained approximately 2.4%, while WTI gained more than 4.5%.
The expectation that OPEC+ will continue its voluntary production cuts until the second quarter of 2024 was the main focus of the market. A decision on extending OPEC+ cuts is expected in the first week of March, with individual countries expected to announce their decisions, sources said.
Adhering to voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as a positive for prices.
The Organization of Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, up 90,000 barrels from January, a study showed.
Strong expectations that Saudi Arabia will keep futures prices of the crude oil it sells to Asian customers little changed from March levels also supported the market on Friday.
Meanwhile, geopolitical tension in the Red Sea also increased prices on Friday. The leader of Yemen’s Houthis said on Thursday that the group would deliver military “surprises” to the region.
The number of drilling rigs in the USA has reached the highest level since September. U.S. energy companies added oil and gas rigs for the second week in a row, Baker Hughes said in a report on Friday. The number of oil rigs, an early indicator of future production, rose by three this week to 506, the highest since September.
On the demand side, Chinese manufacturing activity contracted for the fifth consecutive month in February, an official survey showed.
Eurozone inflation fell in February, according to Eurostat, but both the headline figure and core inflation, which excludes volatile food and fuel prices, missed analysts’ expectations.
US economic data strengthens market forecasts for a rate cut. The US personal consumption expenditures (PCE) index, which supports prices, showed on Thursday that January inflation was in line with economists’ expectations and strengthened the market’s bets for a rate cut in June.
The U.S. Commodity Futures Trading Commission (CFTC) said money managers increased their net long U.S. crude futures and options positions this week to Feb. 27.
