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Oil prices fell on Friday after a Reuters report said OPEC+ was leaning towards resuming oil production increases, while investor concerns softened over the risks of a U.S.-Iran conflict that could affect supply.
Prices declined after Reuters reported on Friday that OPEC+ is leaning towards resuming increases in oil output from April, citing three OPEC+ sources, as the group prepares for peak summer demand and price strength is bolstered by tensions over U.S.-Iran relations.
Both oil benchmarks were poised to register weekly declines, with Brent and WTI set to drop by 1.5% and 2% respectively.
Prices had strengthened earlier in the week on concerns that the U.S. could attack Middle Eastern oil producer Iran over its nuclear programme. But comments on Thursday from U.S. President Donald Trump that the U.S. could make a deal with Iran over the next month drove down prices on Thursday.
Still, U.S. media outlets reported late Thursday that the U.S. was sending a second aircraft carrier to the Middle East, which kept investors on edge.
Away from the Middle East, the Kremlin said on Friday that the next round of peace talks on Ukraine will take place next week.
Kremlin spokesperson Dmitry Peskov confirmed that Moscow and Washington have been discussing bilateral trade and economic cooperation.
He said Moscow hoped that dialogue would continue, but said it was unlikely such discussions would move beyond talk before the conflict in Ukraine was settled.
Price pressure has also come from the International Energy Agency’s latest forecasts, saying in its monthly report that global oil demand growth this year will be weaker than previously expected, with overall supply set to exceed demand.
Thursday’s price falls were amplified by U.S. data showing a massive build in crude stockpiles and growing expectations that increased Venezuelan supply could soon hit the market, IG analyst Tony Sycamore said in a note.
“There is an expectation that Venezuelan oil supply will return to pre-blockade levels in the months ahead,” he said, adding that supply is expected to rise from 880,000 barrels per day to about 1.2 million bpd.
The U.S. Treasury will issue more allowances easing sanctions on Venezuelan energy this week, a White House energy official said on Thursday.
U.S. Secretary of Energy Chris Wright said on Thursday that U.S.-controlled oil sales from Venezuela have totalled more than $1 billion since the capture of President Nicolas Maduro in January and will bring in a further $5 billion in the next few months.
REUTERS
