Oil prices closed higher on Friday but still fell for 7 consecutive weeks, the longest weekly decline since 2018 | Anue Juheng – Energy

International oil prices rose on Friday (8th), but still closed lower for the seventh consecutive week, the longest weekly decline since 2018.

Some analysts attributed Friday’s gains to supportive comments from Russia and Saudi Arabia, but oil prices fell this week as traders remained unmoved by production cuts by major oil producers.

energy commodity prices

• West Texas Intermediate (WTI) crude futures for January delivery rose $1.89, or 2.7%, to settle at $71.23 a barrel.

Recent months this week WTI crude oilFutures prices were still down 3.8%, marking their seventh consecutive weekly decline, according toDow JonesAccording to market data, this is the longest weekly decline since 2018.

• Delivered in FebruaryBrent crude oil (Brent) futures rose $1.42, or 1.9%, to $75.47 a barrel, but were still down nearly 3.9% for the week.
• Gasoline futures for January delivery rose 2.4% to settle at $2.0498 per gallon, after falling 3.4% this week.
• Delivered in JanuaryThermal Fuel FuturesPrices rose nearly 1.3% to settle at $2.581 per gallon, after falling 3% this week.
• Natural gas futures for January delivery fell nearly 0.2% to settle at $2.581 per million Btu, down 8.3% this week.

market drivers

Oil prices have been falling sharply after the OPEC+ meeting on November 30, as traders were disappointed by the voluntary nature of OPEC+’s additional production cuts in the first quarter of next year and questioned whether member countries would comply.

OPEC+ oil-producing countries agreed to voluntarily cut supply to the market by 2.2 million barrels per day in the first quarter of next year, including Saudi Arabia’s widely expected voluntary production cut of 1 million barrels per day, and Russia’s reduced exports. 300,000 barrels/day.

Stephen Innes, managing partner of SPI Asset Management, reported that oil prices rebounded after Russian leader Vladimir Putin met with Saudi Arabian Crown Prince Mohammed bin Salman.

The meeting emphasized continued efforts to stabilize global oil markets and manage production levels, with some attributing Friday’s rise in oil prices to comments from Russia and Saudi Arabia.

Putin and the Saudi Crown Prince issued a joint statement on Thursday, saying that both sides cooperate closely in the energy field and that the efforts of OPEC+ countries to enhance the stability of the global oil market have been successful. The statement stressed the importance of continuing this cooperation and the need for all participating countries to comply with the OPEC+ agreement in a manner that “serves the interests of producers and consumers and supports global economic growth.”

weekly downtrend

WTI and Brent crude oilIt ended the week down nearly 4%, marking its seventh consecutive weekly decline, marking the longest consecutive weekly decline in front-month crude oil futures prices since 2018.

Violeta Todorova, Senior Research Analyst at Leverage Shares said,WTI crude oilIt has fallen more than 20% since its September high as record U.S. output stoked concerns about future global demand. “After rating agency Moody’s downgraded China’s rating from stable to negative, public concerns about the slowdown in global economic growth and the health of China’s economy are growing.”

However, the United States released upbeat economic data on Friday, with 199,000 new jobs added in November, compared with the 190,000 increase expected by economists polled by the Wall Street Journal.

Todorova said that although OPEC+ announced a voluntary production cut of 2.2 million barrels per day in the first quarter of 2024, traders are worried that the production reduction is voluntary rather than mandatory, and member states may not be able to actually implement it. In addition, the U.S.’s record oil production and export volume of nearly 6 million barrels per day also “denies” OPEC+’s ability to influence crude oil prices.

S&P Global Commodity Insights reported on Friday that OPEC+ crude oil production fell by 110,000 barrels per day in November to 42.6 million barrels per day. OPEC’s largest oil producer, Saudi Arabia, has set its November output at 9 million barrels per day, in line with its commitment to “voluntarily reduce production by 1 million barrels per day from June production levels.”

The U.S. Department of Energy on Friday announced a call for up to 3 million barrels of oil for delivery in March as the Strategic Petroleum Reserve (SPR), part of the Department’s efforts to replenish emergency oil reserves after releasing the SPR last year. The Energy Department said it had purchased nearly 9 million barrels of SPR at an average price of US$75 per barrel.

Oil traders are also closely watching developments in a referendum approved by Venezuela last week to claim an oil-rich patch of land in Guyana.