Oil pumpjacks operate on November 2, 2021 in Long Beach, California.
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Oil prices rose on Friday as U.S. officials looked set to reach a debt ceiling deal and the market weighed mixed messages on supplies from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting.
Brent crude stood 69 cents, or 0.9%, higher at $76.95 a barrel. US West Texas Intermediate closed up 84 cents, or 1.2%, at $72.67 a barrel.
On a weekly basis, both benchmarks posted a second week of gains, with Brent climbing 1.7%, while WTI rose 1.6%.
Nonetheless, markets remained cautious as debt negotiations could drag on and fresh concerns loomed over a Federal Reserve interest rate hike next month that would dampen demand after strong consumer spending data. in the United States and inflation figures.
While negotiators may reach an agreement on Friday to raise the US government’s debt ceiling to $31.4 trillion, talks could easily drag into the weekend, an official said. Biden administration.
Benchmarks were down more than $2 a barrel on Thursday after Russian Deputy Prime Minister Alexander Novak downplayed the prospect of further OPEC+ production cuts at its June 4 meeting in Vienna.
Russia tended to leave oil production volumes unchanged because Moscow is content with current prices and production, three sources with knowledge of current Russian thinking told Reuters.
This contrasted with earlier hints of possible production cuts by Saudi Energy Minister Prince Abdulaziz bin Salman, the de facto head of the Organization of the Petroleum Exporting Countries (OPEC), who warned short sellers of “be careful”.
Bets on falling oil prices have increased.
“I think we’re all on our toes here ahead of next week’s OPEC meeting,” said John Kilduff, partner at Again Capital.
Meanwhile, U.S. gasoline demand is expected to remain strong, with motoring group AAA predicting the May 27-29 Memorial Day holiday weekend will be the third busiest for road trips since 2000.
On the supply side, U.S. oil rigs fell by five to 570 this week, according to a report by energy services firm Baker Hughes Co. In May, the number of oil rigs fell by 21 rigs, the largest monthly drop since June 2020.
However, slowing economic growth and persistent inflation in Europe have capped price increases, with Dutch central bank chief Klaas Knot saying the European Central Bank needs at least two more rate hikes interest rate of 25 basis points.
