Investing
Oil slips towards $84, heads for weekly drop as supply concerns ease
By Alex Lawler
LONDON (Reuters) -Oil slipped towards $84 a barrel on Friday, heading for its first weekly loss in about two months after a rise in U.S. crude inventories and the prospect of more Iranian supply eased concern of a tight market.
U.S. crude stocks rose by 4.3 million barrels in this week’s report. Iran has said talks on reviving the international deal on its nuclear programme will restart by the end of November, bringing it a step closer to boosting oil exports.
“The sharp rise in U.S. crude oil stocks and the expectation of nuclear talks being resumed with Iran have temporarily eased concerns about supply to some extent,” said Commerzbank’s Carsten Fritsch.
Brent crude fell 2 cents to $84.30 a barrel by 1345 GMT and U.S. West Texas Intermediate crude slipped 43 cents, or 0.5%, to $82.38. Both benchmarks touched multi-year highs on Monday.
Crude has surged in 2021 as economies recover from the COVID-19 pandemic, but prices are on track to fall this week, with Brent facing its first weekly decline in about two months.
The decline was limited by the prospect that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is unlikely to boost output by more than current plans allow at a meeting next week.
Algeria said on Thursday that a crude output increase by OPEC+ in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks. The alliance, which is gradually unwinding last year’s record output cuts, meets on Nov. 4.
“Supply will therefore continue to play catch-up with demand in the immediate term,” said Stephen Brennock of oil broker PVM.
The heat also came out of the rally because of easing concern over high coal and natural gas prices that have spurred fuel-switching in power generation.
British and European gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.
(Reporting by Alex Lawler; Additional reporting by Roslan Khasawneh in Singapore and Sonali Paul in Melbourne; Editing by David Goodman and David Holmes)
