Oil Climbs 2% but Still Headed for Seventh Weekly Drop

December 09, 2023, 01.41 AM | Source: Reuters
Oil Climbs 2% but Still Headed for Seventh Weekly Drop

ILUSTRASI. Storage tanks of an oil refinery of Essar Oil, which runs India's second biggest private sector refinery, are pictured in Vadinar in the western state of Gujarat, India, October 4, 2016. Picture taken October 4, 2016. REUTERS/Amit Dave

OIL PRICE - JAKARTA. Oil prices were on track for a seventh consecutive weekly decline for the first time in half a decade on Friday on concerns about surplus supply, but prices rose on the day after Saudi Arabia and Russia lobbied OPEC+ members to join output cuts.

Brent crude futures LCOc1 were up $1.71, or 2.3%, at $75.76 a barrel at 12:04 p.m. ET [1704 GMT], while U.S. West Texas Intermediate crude futures CLc1 were up $1.75, or 2.5%, at $70.67 a barrel.

Offering some support, data showed U.S. consumer sentiment perked up much more than expected in December, a development likely to be welcomed by Federal Reserve officials.

Meanwhile, Saudi Arabia and Russia, the world's two biggest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts just days after a fractious meeting of the producers' club.

The Organization of the Petroleum Exporting Countries and its allies last week agreed to a combined 2.2 million barrels per day (bpd) in output cuts for the first quarter of next year. The market has been concerned, however, that some members may not adhere to their commitments.

Friday's price gains could be a sign that the market has found a floor for now after falling for six straight sessions, said Phil Flynn, analyst at Price Futures Group.

"Look to step in with caution but the lows should be in," he said.

Brent and WTI crude futures slid to their lowest since late June on Thursday, a sign that many traders believe the market is oversupplied. Brent is on track to fall 3.9% this week and WTI 4.2%, the biggest weekly losses in five weeks.

Fuelling the market's downturn, Chinese customs data showed its crude oil imports in November fell 9% from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.

U.S. Labor Department data released on Friday showed stronger-than-expected job growth and a drop in the unemployment rate, signaling resilience in the labor market and dampening hopes that the Fed will cut interest rates by early next year.

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