Investing.com — Oil prices staged a rally Friday, but that proved too little too late to avert a fourth-weekly slump as as growing global supply and cooling demand worries muddy sentiment ahead of the OPEC meeting next week.
By 14:30 ET (19:30 GMT), the futures rose 4.1% to settle at $75.89 a barrel, while the contract climbed 3.9% to $80.47 a barrel.
Both contracts are on course for losses of around 4% this week, on track for their fourth straight week of losses, with the benchmarks having lost around a sixth of their value over the last four weeks.
U.S. inventories point to rising supplies
Oil prices have perked up Friday, a day after sinking 5% to a four month-low, mainly triggered by a bigger-than-expected build in U.S. oil , coupled with record-high production levels, stoking concerns about oversupply.
“It has become clearer that the oil balance for the remainder of this year is not as tight as initially expected,” said analysts at ING in a note. “Higher-than-expected supply has eroded a large amount of the expected deficit over 4Q23. And as things stand, the market is still expected to return to surplus in 1Q24.”
Additionally, easing concerns over the Israel-Hamas war weighed, as traders priced in a smaller risk premium from the conflict after it proved to have little impact on Middle Eastern supplies.
Baker Hughes rig count rises; CFTC data eyed
Oilfield services firm Baker Hughes Co (NYSE:BKR) reported its weekly U.S. rig count rose to 500 from 494.
slated for release later in the day will also come in focus following data last week showing traders reined in their bullish bets on oil for a sixth-straight week.
OPEC meeting looms large
Focus is now squarely on an upcoming on Nov. 26, where traders will be looking to see if Saudi Arabia, principally, and Russia roll over their voluntary supply cuts into 2024.
The two recently vowed to maintain their cuts until the end of 2023, with many now expected that the Saudis will likely extend cuts of 1 million barrels of oil per day to offset an expected supply surprise.
“On the balance of risks, we think Saudi Arabia will extend its production cuts into 2024 if they want prices to remain above USD80/bbl,” ANZ Research said in a note.
(Peter Nurse and Ambar Warrick contributed to this article.)