Oil climbs 2%, notches weekly gains ahead of OPEC+ decision
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[March 02, 2024] By
Nicole Jao
NEW YORK (Reuters) -Oil prices rose 2% on Friday and posted weekly gains
as traders awaited an OPEC+ decision on supply agreements for the second
quarter while also weighing fresh U.S., European and Chinese economic
data.
Brent futures for May settled $1.64 higher, or 2%, at $83.55 a barrel.
The April Brent futures contract expired on Feb. 29 at $83.62 a barrel.
U.S. West Texas Intermediate (WTI) for April rose $1.71, or 2.19%, to
$79.97 a barrel.
For the week, Brent added around 2.4% following the switch in contract
months, while WTI gained more than 4.5%.
"The expectation that OPEC+ is going to continue with their voluntary
production cuts well into the second quarter of 2024 is the main focus
on the market," said Andrew Lipow, president of Lipow Oil Associates.
A decision on extending OPEC+ cuts is expected in the first week of
March, sources have said, with individual countries expected to announce
their decisions.
"Sticking to the voluntary production cuts until the end of the year
would be a strong signal and should therefore be seen as
price-positive," Commerzbank analyst Carsten Fritsch said.
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A Reuters survey showed the Organization of the Petroleum Exporting
Countries pumped 26.42 million barrels per day (bpd) in February, up
90,000 bpd from January.
Strong expectations of Saudi Arabia keeping term prices of crude it
sells to Asian customers little changed in April from March levels also
underpinned the market on Friday.
Meanwhile, geopolitical tension in the Red Sea also lifted prices on
Friday, said Tim Snyder, an economist at Matador Economics.
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Miniatures of oil barrels and a rising stock graph are seen in this
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The leader of Yemen's Houthis said on Thursday the group would
introduce military "surprises" in the region.
U.S. energy firms added oil and natural gas rigs for a second
straight week, energy services firm Baker Hughes said in its closely
followed report on Friday.
The oil rig count, an early indication of future output, rose by
three to 506 this week, the highest since September.
On the demand side, Chinese manufacturing activity shrank for the
fifth straight month in February, an official survey showed.
Euro zone inflation fell in February according to Eurostat, but both
the headline figure and core inflation, which strips out volatile
food and fuel prices, just missed analysts' expectations.
Supporting prices, the U.S. personal consumption expenditures (PCE)
index showed January inflation in line with economists' expectations
on Thursday, reinforcing market bets for a June interest rate cut.
Money managers raised their net long U.S. crude futures and options
positions in the week to Feb. 27, the U.S. Commodity Futures Trading
Commission (CFTC) said.
(Reporting by Nicole Jao in New York, Robert Harvey in London, Laura
Sanicola in Washington and Trixie Yap in Singapore; Editing by
Kirsten Donovan, Emelia Sithole-Matarise, Will Dunham and David
Gregorio)
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