Benchmarks, Basra crude notch weekly gain as OPEC+ considers output cut

2022-10-01T09:24:51.000000Z

Shafaq News/ Oil prices dipped on Friday in choppy trading but notched their first weekly gain in five on Friday, underpinned by the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5.

Brent crude futures for November, which expire on Friday, fell 53 cents, or 0.6%, to $87.96 a barrel. The more active December contract was down $2.07 at $85.11.

U.S. West Texas Intermediate (WTI) crude futures fell $1.74, or 2.1%, to $79.49.

Basra's heavy crude added $0.95 to its price tag on Friday to settle at $82.67, posting a weekly gain of $3.45, or 4.35%.

Both contracts rose by more than $1 during the session but dropped on news that OPEC's oil output rose in September to its highest since 2020, surpassing a pledged hike for the month, according to a Reuters survey on Friday.

Brent and WTI gained 2% and 1% on a weekly basis, marking the first weekly rise since August and following nine-month lows hit this week.

Money managers cut their net long U.S. crude futures and options positions in the week to September 27, the U.S. Commodity Futures Trading Commission (CFTC) said.

While the dollar has dropped from 20-year highs earlier in the week, it gained through the day . A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity.

The market has seen support from the prospect of the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering cutting production quotas by between 500,000 and 1 million barrels per day (bpd) at their Oct. 5 meeting.

Analysts expect a production cut because demand fears linked to a possible global economic slowdown and rising interest rates have weighed on crude prices.

U.S. energy firms this week added two oil rigs for a third week in a row, but growth in the third quarter slowed due to recession fears and nagging supply shortages.

Brent and WTI prices finished the third quarter with chunky 23% and 25% declines respectively.

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