Oil prices saw an increase on Friday amid speculations of OPEC+ continuing output cuts. However, the crude benchmarks were headed for weekly losses due to U.S. economic uncertainty and easing of crude supply disruptions as tensions in the Middle East cool.
By 5:10 GMT, Brent crude futures saw a 0.26 percent increase to $83.89 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures saw a 0.25 percent rise to $79.15 per barrel.
Weekly losses in oil prices
Despite the increase in oil prices today, both benchmarks were on track to record weekly losses as investor concerns increased on the prospects of higher-for-longer interest rates and their impact on U.S. economic growth. Meanwhile, tensions in the Middle East seem to have cooled, posing little signs of disrupting global oil supplies. Therefore, Brent crude futures headed for a weekly decline of 6.3 percent. Meanwhile, WTI reached a loss of almost 5.6 percent this week.
OPEC+’s oil output cuts
The decline in oil prices comes only weeks before the next Organization of the Petroleum Exporting Countries and Allies (OPEC+) meeting on June 1. Markets have been expecting OPEC+ to extend its voluntary oil output cuts of 2.2 million barrels per day beyond June if demand maintains its downward trend. However, the alliance has not begun formal talks regarding the cuts before the meeting.
Read: Saudi Arabia set to increase assets under management to 29.4 percent of GDP by 2024
U.S. economic data
The market’s focus now shifts to U.S. economic data and indicators of future crude supply from the world’s largest producer. On Friday, the U.S. Bureau of Labor Statistics will release its monthly nonfarm payroll report. The report measures the strength of the job market and is a critical measure for the Federal Reserve when setting interest rates. Higher rates typically impact the economy and that can reduce oil demand and thus, impact oil prices.
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