Oil rises more than 2 percent ahead of OPEC+ decision
1 آذار 2024 20:05
Oil prices rose on Friday and were set for weekly gains as markets awaited an OPEC+ decision on supply agreements for the second quarter while also weighing fresh U.S., European and Chinese economic data.
Brent futures for May were up $2.24, or 2.73%, at $84.15 a barrel by 12:08 p.m. EST (1334 GMT). The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.
U.S. West Texas Intermediate (WTI) for April rose $2.37, or 3.03%, to $80.63 a barrel.
WTI is on track for a 5.4% increase this week, while following the switch in contract months Brent is around 3.1% higher than last week's settlement price.
"The expectation that OPEC+ is going to continue with their voluntary production cuts well into the second quarter of 2024 is the main focus on the market," said Andrew Lipow, president of Lipow Oil Associates.
A decision on extending OPEC+ cuts is expected in the first week of March, sources have said, with individual countries expected to announce their decisions.
"Sticking to the voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as price-positive," Commerzbank analyst Carsten Fritsch said.
A Reuters survey showed the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, up 90,000 bpd from January.
Strong expectations of Saudi Arabia keeping term prices of crude it sells to Asian customers little changed in April from March levels also underpinned the market on Friday.
Meanwhile, geopolitical tension in the Red Sea also lifted prices on Friday, said Tim Snyder, an economist at Matador Economics.
The leader of Yemen's Houthis said on Thursday the group would introduce military "surprises" in the region.
On the demand side, Chinese manufacturing activity shrank for the fifth straight month in February, an official survey showed.
Euro zone inflation fell in February according to Eurostat, but both the headline figure and core inflation, which strips out volatile food and fuel prices, just missed analysts' expectations.
Supporting prices, the U.S. personal consumption expenditures (PCE) index showed January inflation in line with economists' expectations on Thursday, reinforcing market bets for a June interest rate cut.
"The process of disinflation is reassuringly under way, therefore smart money is currently on a June rate cut," PVM analyst Tamas Varga said in a note on Friday.
Brent futures for May were up $2.24, or 2.73%, at $84.15 a barrel by 12:08 p.m. EST (1334 GMT). The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.
U.S. West Texas Intermediate (WTI) for April rose $2.37, or 3.03%, to $80.63 a barrel.
WTI is on track for a 5.4% increase this week, while following the switch in contract months Brent is around 3.1% higher than last week's settlement price.
"The expectation that OPEC+ is going to continue with their voluntary production cuts well into the second quarter of 2024 is the main focus on the market," said Andrew Lipow, president of Lipow Oil Associates.
A decision on extending OPEC+ cuts is expected in the first week of March, sources have said, with individual countries expected to announce their decisions.
"Sticking to the voluntary production cuts until the end of the year would be a strong signal and should therefore be seen as price-positive," Commerzbank analyst Carsten Fritsch said.
A Reuters survey showed the Organization of the Petroleum Exporting Countries pumped 26.42 million barrels per day (bpd) in February, up 90,000 bpd from January.
Strong expectations of Saudi Arabia keeping term prices of crude it sells to Asian customers little changed in April from March levels also underpinned the market on Friday.
Meanwhile, geopolitical tension in the Red Sea also lifted prices on Friday, said Tim Snyder, an economist at Matador Economics.
The leader of Yemen's Houthis said on Thursday the group would introduce military "surprises" in the region.
On the demand side, Chinese manufacturing activity shrank for the fifth straight month in February, an official survey showed.
Euro zone inflation fell in February according to Eurostat, but both the headline figure and core inflation, which strips out volatile food and fuel prices, just missed analysts' expectations.
Supporting prices, the U.S. personal consumption expenditures (PCE) index showed January inflation in line with economists' expectations on Thursday, reinforcing market bets for a June interest rate cut.
"The process of disinflation is reassuringly under way, therefore smart money is currently on a June rate cut," PVM analyst Tamas Varga said in a note on Friday.