Oil Faces Weekly Loss as Supply Boosts from OPEC+ and Russia Loom

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Oil prices saw a slight increase on Friday but were still on track to finish the week lower, as a potential output boost from OPEC+ and a possible ceasefire in the Russia-Ukraine conflict could increase supply, while mixed U.S. tariff signals limit demand expectations.

Brent crude futures rose by 5 cents to $66.60 a barrel, heading for a 2% weekly decline. U.S. West Texas Intermediate (WTI) crude increased by 6 cents to $62.85 a barrel, but was set to fall 2.9% for the week.

Russian Foreign Minister Sergey Lavrov stated that the U.S. and Russia were making progress toward ending the war in Ukraine, though some aspects of the deal still need to be finalized. A resolution to the conflict and the easing of sanctions on Russia could lead to more Russian oil reaching global markets. Russia, along with the U.S. and Saudi Arabia, is one of the largest oil producers and is part of the OPEC+ group.

Additionally, several OPEC+ members have proposed speeding up oil output increases for June, potentially adding to global supply. Meanwhile, Iranian Foreign Minister Abbas Araqchi expressed willingness to travel to Europe for talks on Tehran's nuclear program, which, if successful, could lead to the lifting of sanctions on Iranian oil exports. Iran is the third-largest oil producer in OPEC, behind Saudi Arabia and Iraq.

Despite these potential supply boosts, the demand outlook remains uncertain, largely due to the ongoing trade war between the U.S. and China, the world's top two oil consumers. Businesses are raising prices and lowering financial forecasts due to higher costs from the trade dispute, which has also disrupted global supply chains and raised concerns about a potential economic slowdown that could impact oil demand.

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author