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After Multi-Week Win, Oil Bulls Concede on Brent But Deny Bears Joy Over WTI -Breaking

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© Reuters.

By Barani Krishnan

Investing.com — Oil bulls lost their win over Brent for a multi-week period but managed to continue to deceive bears by denying them joy over U.S. crude. It finished the day slightly higher than last week, and did not finish at all above Brent.

With producer group OPEC+ gearing to talk the market up again at its monthly meeting next Thursday, there is only so much room for crude prices to correct in an environment where traders are perpetually reminded of the cartel’s attempt to keep supplies abysmally low against demand.

Pre-meeting, Algeria stated that the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed that the crude oil output would not rise above the 400,000 barrels per hour. According to energy experts, the planned 2 million barrels increase by OPEC between November-April is a small drop in the bucket of a market that requires at least a thousand barrels per month.

“The oil market deficit might only be 300,000 barrels a day this quarter, but the risks of a demand surge remain elevated,” said Ed Moya, head of research for the Americas at online trading platform OANDA. 

Stephen Brennock, oil broker at PVM, concurred, telling Reuters that OPEC+ is “intent on continuing to act as a key pillar of price support” with its strangle power over supply. 

London-traded , the global benchmark for oil, finished Friday’s trading up 6 cents, or 0.07%, at $84.38. Brent lost 1.3%, or $1.15 per week, for the week. It was Brent’s first week in the negative after seven straight weeks of wins. Brent rose 7.5% for the month, and is now up 61% year-over-year.

U.S. closed at $83.57 a barrel for 76cs (or 0.9%) more than the previous day. WTI suffered a loss of 19c, or 0.2% on the week, due to this. WTI was up 11% in the month and rose 72% for the year.

Crude prices fell earlier in the week on the possibility of Iran holding nuclear talks with Western powers amid Tehran’s bid to free itself from U.S. sanctions prohibiting the sales of its oil to the world.

Markets were also affected by the weekly rise in crude oil stockpiles in the United States. The Energy Information Administration had reported that the level of inventory was nearly double what the market expected. This was due to the fact that crude oil exporters sent less last week and refiners increased raw oil imports.

 

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