LONDON – Oil prices increased for a second day on Friday as data showed a drop in US stocks, but they were still on track for a weekly loss due to concerns over global supplies following an OPEC+ impasse. By 0845 GMT, Brent crude oil futures were up 60 cents, or 0.8 percent, to US$74.72 a barrel. West Texas Intermediate futures in the United States were up 69 cents, or 1%, to US$73.63.
Prices on both sides of the Atlantic were headed for a weekly loss of about 2%, pulled down by the collapse of output discussions between OPEC and partners, including Russia, known as OPEC+.
The US Energy Information Administration reported on Thursday that crude and gasoline stocks decreased, while gasoline demand hit its highest level since 2019, indicating increased economic growth.
According to Stephen Brennock of oil broker PVM, “a positive EIA stock report helped the oil market bounce into the black.”
“The oil markets in the United States are clearly constrained. However, the only way to avoid greater losses is to minimize the possibility of an OPEC+ price war “Added he.
Worries that members of the OPEC+ group would be tempted to forsake output limitations set during the COVID-19 pandemic curbed gains in oil prices, with talks breaking down due to a deadlock between key producers Saudi Arabia and the United Arab Emirates.
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 an effort to reach an agreement to increase output. The US held high-level talks with Saudi Arabian and UAE officials on Tuesday, according to the White House. Oil prices were also pushed down by the global spread of the Delta coronavirus type and concerns that it could stymie global economic recovery. (Yuka Obayashi contributed additional reporting, and David Goodman edited the piece.)/n
