Mar 1 2024: LONDON (Reuters) – Oil prices saw an uptick on Friday, with weekly gains in sight, as the market awaited a decision from OPEC+ regarding supply agreements for the second quarter, alongside digesting fresh economic data from the United States and China.
By 0950 GMT, Brent futures for May were up $1.01, or 1.23%, reaching $82.92 a barrel. The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.
Meanwhile, U.S. West Texas Intermediate (WTI) for April surged 97 cents, or 1.24%, to $79.23 a barrel.
WTI is set for a 3.6% increase this week, with Brent approximately 1.6% higher than last week’s settlement price following the contract month switch.
DBS Bank’s energy sector team lead, Suvro Sarkar, stated that the likelihood of Saudi-led OPEC+ continuing supply cuts beyond the first quarter, possibly until the end of 2024, is expected to maintain oil prices above $80 a barrel.
A decision on extending OPEC+ cuts is anticipated in the first week of March, as per sources, with individual countries poised to announce their stances.
A Reuters survey revealed that the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, marking a 90,000 bpd increase from January.
Moreover, strong expectations of Saudi Arabia keeping crude prices stable for its Asian customers in April, compared to March levels, further supported the market on Friday.
On the demand front, Chinese manufacturing activity contracted for the fifth consecutive month in February, according to an official survey.
However, in a boost to prices, the U.S. personal consumption expenditures (PCE) index indicated January inflation in line with economists’ expectations on Thursday, reinforcing market predictions for a June interest rate cut.
PVM analyst Tamas Varga noted in a Friday commentary, “The process of disinflation is reassuringly under way, therefore smart money is currently on a June rate cut.”
