Oil prices were mixed on Friday but headed for their first weekly losses in at least eight weeks after U.S. oil stocks rose more than expected, and Iran flagged it was resuming talks with Western powers which could lead to an end to sanctions.
U.S. West Texas Intermediate (WTI) crude futures fell 4 cents to $82.77 a barrel by 0151 GMT, while Brent crude futures rose 12 cents, or 0.1%, to $84.44 a barrel. Both benchmarks were on track to fall about 1% for the week — the first weekly drop in 10 weeks for WTI and the first in eight weeks for Brent.
The heat has come out of a two-month rally stoked by tight gas and coal prices in Europe and China which had spurred fuel-switching in power generation to fuel oil and diesel while supplies were tight.
U.S. oil stocks rose much more than expected in the week to Oct. 22, data from the Energy Information Administration showed on Wed.
Supply Concerns Top Oil Producers Meeting in November
All eyes are on the next meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+, on Nov. 4, with analysts expecting them to stick to their plan to add 400,000 barrels per day of supply each month until April 2022.
“Saudi Arabia has cautioned that, with an unclear demand picture, there could be a ‘huge uplift’ in global oil stocks in 2022,” JPMorgan analysts said in a note.
Concerns about erratic demand growth persist, with China looking to curb pollution ahead of the Beijing Winter Olympics and restricting mobility to curb any outbreaks of Covid-19.
China reported 64 new confirmed coronavirus cases for Oct. 28, compared with 39 a day earlier, the country’s health authority said on Friday.