Oil prices continued to rise on Friday following indications from OPEC+ members Saudi Arabia and Russia that they might pause or reverse output agreements. This optimism was further bolstered by an interest rate cut in Europe, which raised expectations for a similar move in the U.S.
Brent crude futures increased by 16 cents, or 0.2%, reaching $80.03 per barrel, while U.S. West Texas Intermediate crude futures also rose by 16 cents, or 0.2%, to $75.71 as of 0007 GMT.
On Thursday, prices surged after Saudi Arabia and Russia reassured markets about supply agreements. However, prices are still heading for a weekly loss as analysts perceived Sunday’s OPEC+ meeting as signaling increased supply, which is typically bearish for prices.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, agreed to extend most production cuts into 2025. However, they allowed for the gradual unwinding of voluntary cuts from eight members.
Saudi Energy Minister Prince Abdulaziz bin Salman, attending an event in Russia alongside Russian Deputy Prime Minister Alexander Novak, stated that OPEC+ could pause or reverse voluntary output increases if market conditions weaken.
“We are ready to react quickly to market uncertainties,” Novak said, attributing the price drop after the weekend meeting to misinterpretation of the agreement and speculative factors.
Jarand Rystad, founder and CEO of Rystad Energy consultancy, told Reuters that OPEC+ is likely to continue managing the market but may need further cuts as demand softens slightly while supply remains sufficient unless adjustments are made. He noted that the ideal price range for OPEC+ is between the low 80s and high 70s in U.S. dollars per barrel.
The European Central Bank’s first interest rate cut since 2019 on Thursday led analysts to speculate that the U.S. Federal Reserve might do the same, which would boost oil demand.
On Friday, market participants will be closely watching the release of Chinese commodity trade data for indications of demand trends in the world’s second-biggest oil consumer after the U.S.
