Oil prices rose on Friday, but headed for first weekly losses in at least eight weeks after US oil stockpiles rose more than expected and Iran said it was continuing talks with Western powers that could lead to an end to sanctions.
Brent crude futures rose 27 cents, or 0.3 percent, to $84.59 a barrel, while West Texas Intermediate (WTI) crude futures rose 12 cents, or 0.1 percent, to $82.93 a barrel.
The rally is near the top and will likely soften in the near term while prices remain high. Touching multi-year highs on Monday, both benchmarks are well on their way to falling about 1% for the week. Heading towards the first weekly drop in 10 weeks for WTI and the first weekly drop in eight weeks for Brent.
The heat of the two-month rally, triggered by tight gas and coal prices, spurring a switch to fuel and diesel in electricity generation, while oil supplies are tight in Europe and China.
U.S. oil inventories rose much more than expected in the week to October 22, the Energy Information Administration showed on Wednesday.
Saudi Arabia has warned of a ‘huge increase’ in global oil inventories in 2022, with an uncertain demand picture. Investors are watching the OPEC+ meeting next week for the supply decision. All eyes are on the next meeting of its allies, including the Organization of the Petroleum Exporting Countries (OPEC), Russia, on November 4. Analysts expect the bloc to stick to its plan to add 400,000 bpd each month through April 2022.
Concerns about erratic demand growth remain as China tries to curb air pollution ahead of the Beijing Winter Olympics and curb mobility to curb a new COVID-19 outbreak.