OPEC+ is unlikely to change its overall oil production policy. Oil prices rose for a second day on Friday and are poised for a sixth weekly gain after Saudi Arabia and Russia, the world’s second and third largest crude producers, pledged to cut production by the end of September.
Brent crude futures for October rose 2 cents at 0609 GMT to $85.16 a barrel, while West Texas Intermediate crude (WTI) for September rose 9 cents, or 0.1%, to $81.64.
Both indicators are on their sixth weekly earnings track and are experiencing the longest weekly earnings streak this year. In the last six weeks, Brent has increased by 15.4% and WTI by 18.2%.
Saudi Arabia on Thursday extended its voluntary oil production cut of 1 million barrels per day until the end of September. Russia’s Deputy Prime Minister, Alexander Novak, said that Russia will also reduce its oil exports by 300,000 barrels per day in September.
The OPEC+ Joint Ministerial Monitoring Committee is unlikely to change overall oil production cuts at its meeting Friday, sources said. However, Saudi Arabia’s extension of the cuts and Russia’s statements before the OPEC+ meeting increased supply concerns and supported prices.
However, recent US data showing tight labor markets and a slowing service sector have triggered some concerns that an economic slowdown will reduce oil demand and lower prices, despite supply cuts.
The strong dollar has put pressure on crude oil prices, with the US Federal Reserve’s potential to raise interest rates, and it remains to be seen whether a warm labor market will force the Fed to tighten policy further.
The decline in eurozone business activity worsened in July than originally thought, and the Bank of England raised interest rates to a 15-year high on Thursday. Higher borrowing costs for businesses and consumers can slow economic growth and reduce oil demand.
However, the outlook for improved demand and tighter supply may continue to stimulate oil markets, also winking to the upside momentum.
Also, upcoming US non-farm payroll data is closely watched and will drive market sentiment tonight.
