Oil falls but notches weekly gain as OPEC+ considers output cut

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HOUSTON – Oil prices fell in choppy trading on Friday but notched their first weekly gain in five on Friday, supported by the possibility that OPEC+ will agree to cut crude output when it meets on October 5.

Brent crude futures for November, which expire on Friday, fell 53 cents, or 0.6%, to $87.96 a barrel. The most active December contract was down $2.07 at $85.11.

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U.S. West Texas Intermediate (WTI) crude futures fell $1.74, or 2.1%, to $79.49.

Both contracts rose more than $1 earlier in the session but fell on news that OPEC oil production rose in September to its highest since 2020, beating the promised increase for the month , according to a Reuters poll on Friday.

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“There’s definitely some profit taking from the gains we saw earlier in the week. $80 is kind of a pivot point these days,” said John Kilduff, partner at Again Capital LLC in New York.

“Rising concerns about financial stability in the UK … are undermining the outlook for demand once again,” Kilduff added.

Brent and WTI gained 2% and 1% on the week, marking the first weekly rise since August and after hitting nine-month lows this week.

Although the dollar has come off 20-year highs earlier in the week, it has gained on the day. A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity.

“Price swings have become the norm as market players juggle concerns about the global economy and the prospect of tighter oil supplies,” said Stephen Brennock of brokerage PVM oil.

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The market has been supported by the prospect of the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering cutting production quotas by 500,000 to 1 million barrels per day (bpd) at their meeting on 5 of October

“The deteriorating outlook for crude oil demand will not allow oil to rebound until energy traders are confident that OPEC+ will cut production,” said OANDA senior analyst Edward Moya.

Analysts expect a cut in production as demand fears linked to a possible global economic slowdown and rising interest rates have weighed on crude oil prices.

US energy companies added two oil rigs this week for the third week in a row, but growth in the third quarter slowed due to recession fears and persistent supply shortages.

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Top White House officials will also meet with oil executives on Friday to discuss Hurricane Ian and low gasoline inventories as President Joe Biden warns the industry not to raise prices for consumers, two sources familiar with the matter said with the subject

Brent and WTI prices ended the third quarter with sharp declines of 23% and 25%, respectively.

Analysts expect buying to pick up as Russia prepares to annex four regions of Ukraine from Russia on Friday in a move that could force Western nations to tighten sanctions against Moscow. (Reporting by Rowena Edwards; Additional reporting by Sonali Paul in Melbourne and Emily Chow in Singapore; Editing by Jason Neely, Elaine Hardcastle and Marguerita Choy)



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