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- OPEC+ could further boost output in November, sources say
- Analysts predict oil market surplus in fourth quarter and beyond
- Chevron refinery fire unlikely to affect broader market
HOUSTON, Oct 3 (Reuters) – Oil prices settled higher on Friday but posted a weekly loss of 8.1% after news of potential increases to OPEC+ supply.
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Brent crude futures closed up 42 cents, or 0.7%, at $64.53 a barrel by, while U.S. West Texas Intermediate crude was up 40 cents, or 0.7%, at $60.88.
For the week, Brent fell 8.1%, the largest weekly loss in over three months. WTI tumbled 7.4% in the week.
“The expected increase in OPEC+ production and the Iraq/Kurdish pipeline beginning to flow after being shut in the past two years is keeping sellers present in crude,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“Hamas is also starting negotiations with the Trump administration on a peace plan. Add in the bearish EIA storage data from earlier this week and it’s hard to be bullish crude in the near term,” Kissler said.
Eight OPEC+ countries are likely to further raise oil output on Sunday with the group’s leader Saudi Arabia pushing for a large increase to regain market share and Russia suggesting a more modest rise, four people with knowledge of the OPEC+ talks said.
Potentially higher OPEC+ supply and slowing global crude refinery runs owing to maintenance and a seasonal dip in demand in the months ahead are set to weigh on market sentiment, analysts said.
“Demand indicators have fallen a touch through the Atlantic Basin as summer demand comes to an end. The over-supplied implied balance from a fundamentals perspective starting in October is gaining ground,” said Rystad Energy analyst Janiv Shah.
JPMorgan analysts, meanwhile, said they believed September marked a turning point, with the oil market heading towards a sizeable surplus in the fourth quarter and into next year.
Meanwhile, through a pipeline from the semi-autonomous Kurdistan region in northern Iraq to Turkey on Saturday for the first time in 2-1/2 years, Iraq’s oil ministry said earlier this week.
Meanwhile, U.S. President Donald Trump gave Hamas until Sunday night to agree to his proposal to end Israel’s war in Gaza.
U.S. crude oil, gasoline and distillate inventories rose last week as refining activity and demand softened, according to the Energy Information Administration on Wednesday, further weighing on prices.
On the supply side, producers cut oil rigs by 2 to 422, oilfield service provider Baker Hughes said.
Elsewhere on Friday, a fire broke out at Chevron’s (CVX.N) El Segundo refinery overnight, though a county official said the flames had been confined to one area. The refinery is one of the largest on the U.S. West Coast, with capacity of 290,000 bpd.
It was not immediately clear if there was any impact on production, but the impact on oil prices could be limited, analysts said.
Reporting by Robert Harvey and Sudarshan Varadhan; Editing by David Goodman, Susan Fenton, Chris Reese and Diane Craft
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