Jul 29, 2022 03:00AM ET
By: AnalysisWatch
Oil prices were broadly steady on Friday, driven by supply concerns as attention turns to the next meeting of OPEC and its allies, although recession fears dampened gains.
Futures contracts for September delivery of West Texas Intermediate crude in the United States were up 67 cents, or 0.7 percent, at $97.09 a barrel by 02:40 AM ET, reversing losses from the previous session and posting a gain of nearly 3 percent for the week.
Brent crude futures for September expiring Friday fell 12 cents, or 0.1 percent, to $107.02 per barrel.The more actively traded October contract gained 48 cents, or 0.5 percent, to $102.31.
It looks very much like we are back in trade-off mode, with sentiment swinging back and forth between the risks of a recession in the second half of the year and a fundamentally undersupplied market.
The key factor will be the next meeting of the Organization of Petroleum Exporting Countries and its allies, led by Russia, to be held on August 3 and known as OPEC+.
A record 9.7 million barrels per day supply cut agreed in April 2020, when demand was hit by the COVID-19 pandemic, is now available.
Two OPEC+ sources said the group would consider leaving oil production unchanged in September, but two OPEC+ sources also told Reuters they would discuss a modest increase.
A decision not to increase output would disappoint the United States after U.S. President Joe Biden visited Saudi Arabia this month in hopes of reaching an agreement on oil production.
A senior U.S. government official said Thursday the administration is optimistic about the OPEC+ meeting and said additional output would help stabilize the market.
However, analysts said it would be difficult for OPEC+ to significantly increase supply as many producers are struggling to meet their production quotas due to a lack of investment in oil fields.