TOKYO: Oil prices were mixed on Friday, with a lift from lower crude and gasoline stocks in the United States, but they were still on track for a weekly loss due to concerns that an OPEC+ deadlock might increase global oil supplies. By 0140 GMT, Brent crude oil futures were down 9 cents, or 0.1 percent, at US$74.03 per barrel. US West Texas Intermediate futures were trading at US$72.95 per barrel, up a penny.
Both benchmarks were on track for a weekly loss of about 3%, as traders remained concerned that the collapse of discussions between the Organization of Petroleum Exporting Countries and allies, including Russia, known as OPEC+, could result in an increase in oil supplies.
“A substantial drop in the US stockpile confirmed thoughts that fuel consumption was expanding as the US driving season began,” said Hiroyuki Kikukawa, general manager of Nissan Securities’ research department.
“Some investors became bullish despite the OPEC+ spat because there hasn’t been any significant increase in US shale output,” he said.
The US Energy Information Administration reported on Thursday that crude and gasoline stocks decreased, and gasoline demand hit its highest level since 2019, indicating increased strength in the US economy.
Crude inventories decreased 6.9 million barrels to 445.5 million barrels in the week ending July 2, the lowest since February 2020 and more than the 4 million barrel decline predicted in a Reuters poll. Stocks of gasoline plummeted by 6.1 million barrels, much above forecasts of a 2.2 million-barrel drop. Even as oil prices rise toward $75 per barrel, shale producers in the United States are sticking to their promises to cut investment and keep output steady, a divergence from prior boom cycles. Despite this, some traders were concerned that due to a breakdown in talks between major oil producers Saudi Arabia and the United Arab Emirates, members of the OPEC+ group could be persuaded to forsake output limitations that they had adhered to during the pandemic. The two Gulf OPEC allies are at odds over a proposed accord that would have increased oil supply.
OPEC+ sources said on Wednesday that Russia was attempting to mediate in order to assist in reaching an agreement to increase output. The US held high-level talks with Saudi Arabian and UAE officials on Tuesday, according to the White House. (Yuka Obayashi contributed reporting, and Richard Pullin edited the piece.)/n
