Oil prices were little changed on Friday but were on track to lose for a fourth consecutive week after falling nearly 5% on Thursday to a four-month low on concerns about global demand.
Brent futures rose 4 cents, or 0.1%, to $77.46 a barrel at 05:29 GMT. West Texas Intermediate crude (WTI) rose 5 cents, or 0.1%, to $72.95 a barrel. Both have lost about a sixth of their value in the past four weeks.
Oil prices have fallen slightly this year, although demand has exceeded optimistic expectations. OPEC supply, excluding those who decided to cut supply, was much stronger than expected, partially offset by cuts from Saudi Arabia and Russia.
Rapid monthly spreads for both contracts have returned to contango. Contango is a situation where a commodity’s futures price is above the expected spot market price and near-term delivery price, a market trend that indicates supply is healthy.
Oil’s decline this week was due to a sharp increase in US crude inventories and record production levels. High production in the world’s largest oil consumer has triggered concerns about weak demand, analysts say.
A global oil demand tracker said demand in the first half of November averaged 101.6 million barrels per day (bpd), 200,000 bpd lower than its forecast for the month.
The latest drop in prices could also lead Saudi Arabia to extend its voluntary oil production cut by an additional 1 million barrels per day through 2024, analysts said.
The oil balance for the remainder of this year is thought to be not as tight as initially expected. Based on current conditions, the market is still expected to return to surplus in the first quarter of 2024.
Rolling over additional supply cuts in Saudi Arabia to early 2024 is likely to help erase the expected glut and provide some support to the market.