Oil Posts Weekly Loss, On Course For Worst Monthly Declines Since December

Meanwhile, OPEC this weekend is expected to extend it output cuts: File Image/Pixabay

As the analytical community awaited Sunday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) to see if the cartel will maintain its output cuts, crude traders on Friday again indulged their bearish sentiments about high interest rates ruining demand and caused another daily dip in prices.

Also, for the week Brent settled down 0.6 percent, while West Texas Intermediate posted a 1 percent loss, and both were on course for their biggest monthly declines since December.

Brent for Friday settled down 24 cents at $81.62 per barrel, and WTI settled down 92 cents at $76.99.

Sources told Reuters that OPEC members were working on a deal that would allow it to extend some of its production cuts into 2025; the deal could involve some or all of the cuts of 3.66 million barrels per day (bpd) extending into 2025 and some or all of the voluntary cuts of 2.2 million bpd into the third or fourth quarter of 2024.

Rory Johnston, founder of oil research service Commodity Context, remarked that "If the cuts are indeed extended into 2025 that will also raise the issue of the group's planned capacity audit and baseline reset, which likely won't be settled until later this year."

Meanwhile, the Energy Information Administration on Friday revealed that U.S. crude production rose in March to its highest level this year, contrasted by fuel product supplied falling 0.4 percent to 19.9 million bpd; however, the EIA also reported that implied gasoline demand was mounting a recovery, on the heels of crude inventories dropping by the most since January.

Still, the overall market outlook is less than stellar: Bloomberg on Friday noted that "Brent's [timespread] for August against September, which will become the prompt on Monday, has narrowed to 30 cents in the bullish backwardation pattern, from 44 cents last week; Dubai's for June against July has almost halved in the period, to 39 cents in backwardation."