Oil jumps 4% after week-long selloff, but falls for a fourth week
Send a link to a friend
[November 18, 2023] By
Nicole Jao
NEW YORK (Reuters) -Oil prices jumped more than 4% on Friday, rebounding
from a four-month low hit in the previous session, as investors who had
taken short positions took profits and while U.S. sanctions on some
Russian oil shippers lent support.
Brent crude futures settled up $3.19, or about 4.1%, at $80.61 a barrel,
while West Texas Intermediate crude (WTI) rose $2.99, or 4.1%, at
$75.89.
"You're getting a natural profit-taking rebound and short covering, to a
degree," said John Kilduff, partner at Again Capital LLC in New York.
Some of the losses were offset after the U.S. imposed sanctions this
week on maritime companies and vessels for shipping Russian oil sold
above the Group of Seven's price cap.
Still, both benchmarks ended the week more than 1% lower, their fourth
straight weekly decline, mostly weighed down by a rise in U.S. crude
inventories and sustained record high production. [EIA/S]
China's deepening property crisis and slowing industrial growth also
weighed.
"Demand growth from China has been falling short of expectations," said
Andrew Lipow, president of Lipow Oil Associates.
![](http://archives.lincolndailynews.com/2023/Nov/18/images/ads/current/chicagostreet_quarter_FFARM_2023.png)
U.S. oil producers have been cutting the number of active drilling rigs
for nearly a year due to weaker prices. The oil rig count, however, this
week rose by six, the most since February, energy services firm Baker
Hughes said.
"When you have a sharp drop in price, the producers think twice about
moving ahead with capital spending and projects," said Phil Flynn, an
analyst at Price Futures Group.
[to top of second column] |
![](../images/111823PIX/busine49.jpg)
The sun is seen behind a crude oil pump jack in the Permian Basin in
Loving County, Texas, U.S., November 22, 2019. Picture taken
November 22, 2019. REUTERS/Angus Mordant/File Photo
![](http://archives.lincolndailynews.com/2023/Nov/18/images/ads/current/debbiesfloral_lda_CHRISTMASOPEN_2023.png)
Some analysts said Thursday's sharp sell off may have been overdone,
particularly in light of escalating tensions in the Middle East that
could disrupt oil supplies and the U.S. vowing to enforce sanctions
against Hamas-backer Iran.
With Brent below $80, many analysts expect OPEC+, principally Saudi
Arabia and Russia, to extend output cuts into 2024.
The OPEC+ group, comprising of the Organization of the Petroleum
Exporting Countries and its allies, is set to consider whether to
make additional oil supply cuts when the group meets later this
month, three sources told Reuters.
"Oil prices are down slightly this year despite demand exceeding our
optimistic expectations," Goldman Sachs analysts said in a note.
"Non-core OPEC supply has been much stronger than expected, partly
offset by OPEC cuts."
For 2023, the U.S., which makes up two-thirds of non-OPEC+ growth,
is forecast to deliver annual gains of 1.4 million barrels per day
(bpd), according to the International Energy Agency (IEA).
Meanwhile, inflation in the euro zone appears to be thawing. On
Friday, the EU's statistics office confirmed annual inflation slowed
sharply.
(Reporting by Nicole Jao, Natalie Grover, Florence Tan and Sudarshan
Varadhan; Editing by Marguerita Choy and David Gregorio)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |