NEW YORK (Reuters) – Oil prices traded sideways on Friday after briefly rising near $1 a barrel as the market balanced fears of a slowdown in demand due to slowing U.S. economic activity with the uncertainty of supply.
Brent crude futures were trading down 5 cents, or 0.1%, at $110.00 a barrel at 0310 GMT, while US West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.2%, to $104.46 a barrel. Prices were down around 1.5% in the previous session.
Crude futures have returned to sell mode after U.S. manufacturing and services PMIs came in well below expectations, as well as weaker manufacturing data in Germany, Stephen Innes said. managing partner at SPI Asset Management.
“Under these conditions, rising crude oil prices will become super sensitive to any perceived or otherwise increased supply inflow,” Innes said, noting signs of Russian crude reaching the oil complex and mounting pressure on OPEC to increase production.
OPEC and allied producing nations, including Russia, will likely stick to an accelerated production increase plan in August in hopes of lowering crude prices and inflation as the US president Joe Biden plans to visit Saudi Arabia, sources said.
The group known as OPEC+ agreed at its last meeting on June 2 to increase production by 648,000 barrels per day in July, or 7% of global demand, and by the same amount in August, up compared to the original plan to add 432,000 barrels per day. one month out of three months until September.
However, the group has struggled to meet monthly increase targets due to underinvestment in oilfields by some OPEC members and, more recently, Russian production losses.
Official weekly estimates of U.S. oil inventories were due to be released on Thursday, but technical issues will delay those numbers until next week, the U.S. Energy Information Administration said, without giving a specific timeline.