Oil prices stabilized on Friday after key OPEC+ members, Saudi Arabia and Russia, indicated a possible pause or reversal in planned output increases. Despite this, crude remains on track for its third consecutive weekly decline due to ongoing demand concerns.
This week saw a decline in crude prices following OPEC+’s announcement on Sunday to gradually phase out some production cuts starting in October. The fall was exacerbated by rising U.S. inventories, which heightened demand worries, even though a brief rally occurred on Thursday following the supportive comments from Saudi Arabia and Russia.
As of 0824 GMT, Brent crude futures had dipped 11 cents, or 0.1%, to $79.76 a barrel. Conversely, U.S. West Texas Intermediate crude futures edged up 13 cents, or 0.2%, to $75.68 a barrel.
“Oil prices managed to regain some ground over the past few days, tapping on some reassurances from OPEC+,” noted Yeap Jun Rong, a market strategist at IG.
Friday’s data from China revealed a second consecutive monthly increase in exports in May, but highlighted ongoing concerns about weak domestic demand as crude oil imports declined. China remains the world’s largest importer of crude oil.
“Exports handsomely beat expectations,” said Tamas Varga of oil broker PVM. “But worryingly for oil, overall imports were again down.”
Additionally, the European Central Bank (ECB) executed its first interest rate cut since 2019 on Thursday, leading analysts to anticipate a similar move by the U.S. Federal Reserve. Lower interest rates typically stimulate economic growth, thereby boosting oil demand.
Looking ahead, the release of the latest U.S. nonfarm payrolls data for May at 1230 GMT on Friday is expected to provide further insights into the timing of the Fed’s potential rate cuts this year.
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