Oil prices rose in early trading on Friday following OPEC+’s decision to keep its production cut policy, but benchmarks headed towards weekly losses.
Brent crude futures were up 37 cents, or 0.5%, at $79.07 a barrel at 04:15 GMT, while WTI crude oil futures were up 30 cents, or 0.4%, at $74.12 a barrel.
Two OPEC+ sources said the group has not changed its oil production policy and a decision will be made in March on whether production cuts will be extended.
The Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies, known as OPEC+, are implementing a 2.2 million barrel per day (bpd) production cut for the first quarter, as announced in November.
Production cuts are said to keep supply tight in the first quarter, non-OPEC production increases will return to normal, and US production growth will slow to 300,000 barrels per day (bpd) in 2024 from 800,000 barrels per day last year.
The US Federal Reserve’s decision to keep the overnight benchmark interest rate in the range of 5.25-5.50% and Powell’s comments, saying that interest rates have reached their peak and will fall further in the coming months also supported oil prices.
Low-interest rates will lower consumer borrowing costs, which will increase economic growth and oil demand.
But oil prices headed for weekly losses of about 5% as unsubstantiated reports of a ceasefire between Israel and Hamas capped gains and caused contracts to fall more than 2% on Thursday.
Russian oil tankers continue to transit the Red Sea largely undisturbed by Houthi attacks, contradicting market beliefs that there will be sweeping disruptions to global oil supply flows.
The Iran-linked group said on Thursday its naval forces targeted an unidentified British merchant ship in the Red Sea in the latest tensions in shipping.