NEW YORK (Reuters) – Oil futures rose on Friday, reversing initial losses and setting for a fourth week of gains after OPEC sources said the producer group expected a limited growth in US oil production this year despite rising prices.
Officials of the Organization of the Petroleum Exporting Countries obtained the outlook for US production from industry experts, OPEC sources said. This would give the producer group more power to manage the market ahead of a potential increase in shale production in 2022.
Brent crude futures contracts rose 43 cents, or 0.6%, to $ 73.51 per barrel. U.S. West Texas Intermediate (WTI) crude rose 60 cents, or 0.8%, to $ 71.64 a barrel.
Both benchmarks were heading for a weekly gain of around 1.1%.
âOil markets are recovering because OPEC doubts that the increase in US oil production is enough to change their plans to support prices,â said Phil Flynn, senior analyst at Price Futures Group in Chicago.
On Wednesday, Brent settled at its highest price since April 2019 and WTI closed at its highest since October 2018. Gains were limited by lingering concerns about the pandemic and a stronger US dollar, this which makes oil more expensive in other currencies.
Sources told Reuters that on Tuesday, officials from OPEC’s Economic Commission (ECB) Council and external presenters attended a meeting focused on US production. OPEC heard more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday.
Although there has been general agreement on limited growth in U.S. supply this year, an industry source said forecasts for 2022 ranged from growth of between 500,000 and 1.3 million barrels per year. day.
“The general feeling about the shale was that it would come back as prices rose but not very quickly,” said a source from one of the companies who provided the forecast to OPEC.
Rising oil prices have prompted some US energy companies to return to the well rig. The number of oil rigs, an early indicator of future production, increased by eight this week to 373, the highest since April 2020, according to energy services firm Baker Hughes Co.
On Thursday, Iran’s top negotiator said an agreement was near in talks between Tehran and Washington on relaunching the 2015 Iran nuclear deal. This added to the pressure on prices.