HOUSTON -Oil prices rose on Friday but were headed for a weekly loss of about 7% or more after news of potential increases to OPEC supply.
Brent crude futures were up 64 cents, or 1%, at $64.75 a barrel by 12:17 p.m. ET . U.S. West Texas Intermediate crude was up 72 cents, or 1.2%, at $61.17.
For the week, Brent was trading down 7.6% and WTI was on course for a 7% decline.
“Oil prices are stabilizing at $60.00 a barrel after falling over 7.5% this week, reaching a 16-week low,” said Fiona Cincotta, senior markets analyst at City Index.
“The market is steadying ahead of the OPEC meeting this weekend, where the group could agree to raise production by anywhere between 274,000 and 411,000 barrels per day. This is two to three times higher than the October increase as Saudi Arabia looks to reclaim market share.”
Eight OPEC countries are likely to further raise oil output on Sunday with the group’s leader Saudi Arabia pushing for a large increase to regain market share and Russia suggesting a more modest rise, four people with knowledge of the OPEC talks said.
Potentially higher OPEC supply and slowing global crude refinery runs owing to maintenance and a seasonal dip in demand in the months ahead are set to weigh on market sentiment, analysts said.
“Demand indicators have fallen a touch through the Atlantic Basin as summer demand comes to an end. The over-supplied implied balance from a fundamentals perspective starting in October is gaining ground,” said Rystad Energy analyst Janiv Shah.
JPMorgan analysts, meanwhile, said they believed September marked a turning point, with the oil market heading towards a sizeable surplus in the fourth quarter and into next year.
Elsewhere on Friday, a fire broke out at Chevron’s El Segundo refinery overnight, though a county official said the flames had been confined to one area. The refinery is one of the largest on the U.S. West Coast, with capacity of 290,000 bpd.
It was not immediately clear if there was any impact on production, but the impact on oil prices could be limited, analysts said.
“The El Segundo refinery is on the West Coast, which is isolated from the rest of the U.S. as far as domestic oil flow is concerned; therefore, its impact is most likely negligible,” said PVM analyst Tamas Varga.
Saxo Bank analyst Ole Hansen said: “Apart from lifting already elevated gasoline prices in California, I don’t think the fire should have a broader market impact.”
This article was generated from an automated news agency feed without modifications to text.
