© Reuters. FILE PHOTO: The Kozmino oil refinery on the shores of Nakhodka Bay near the port of Nakhodka, Russia August 12, 2022. REUTERS/Tatiana Meel/File Photo
It’s Arathy Somasekar
HOUSTON (Reuters) – Oil futures fell 1.5% in dull trading on Friday ahead of a meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday and an EU ban on Russian imports on Monday.
Futures settled $1.31, down 1.5%, at $85.57 a barrel. US West Texas Intermediate (WTI) futures fell $1.24, or 1.5%, to $79.98 a barrel.
Both contracts moved in and out of negative territory, but posted their first weekly gains of about 2.5% and 5%, respectively, after three consecutive weeks of declines.
“Traders will hesitate to go short at the end of the week if there are growing rumors that OPEC will try to shock and surprise the market at their weekly meeting,” said Phil Flynn, analyst at Price Futures Group.
OPEC+ is expected to stick to its current goal of cutting oil production by 2 million barrels per day (bpd) when it meets on Sunday, but some experts believe that oil prices could fall if the group does not cut further.
“Crude has a risk over the weekend and could be volatile next week,” said Oanda analyst Craig Erlam, a sentiment echoed by other analysts.
Russian oil output could fall by 500,000 to 1 million bpd in early 2023 due to the European Union’s ban on offshore exports from Monday, two sources at major Russian producers said.
Poland agreed to an EU agreement on a price of $60 a barrel on the price of Russian oil, allowing the bloc to go ahead and ratify the agreement at the end of the week, Poland’s ambassador to the EU, Andrzej Sados, said.
European Commission President Ursula von der Leyen said that the price of Russian oil will change over time so that the agreement will be in line with market conditions.
Russia’s Urals traded at around $70 a barrel on Thursday afternoon. The cap was designed to reduce costs in Russia while not causing oil prices to rise.
Sending signs, China is expected to announce a relaxation of its measures to contain COVID-19 in a few days, sources told Reuters, which will be a major change for the world’s second largest oil consumer, although experts warn that reopening the economy is very difficult. maybe a few months.
U.S. crude oil estimates, which indicate future production, were unchanged this week, according to Baker Hughes. Concerns also grew that US shale may no longer be able to sustain production in the short term. [[RIG/U]
Official data also showed that US employers added more jobs than expected in November as hourly earnings rose again, which could give the Federal Reserve more incentive to raise interest rates.
Money managers cut their long-term futures and options in the week to Nov. 29, the US Commodity Futures Trading Commission (CFTC) said.