Oil rose further above $84 a barrel on Friday, within sight of a multi-year high hit this week, as expectations that OPEC and its allies will keep supply tight countered rising US inventories and the prospect of more Iranian exports.
Algeria said on Thursday that a crude output increase by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies in December should not exceed 400,000 barrels per day (bpd) because of market uncertainties and risks. The alliance, which is gradually unwinding last year’s record output cuts, meets on November 4.
“Supply will therefore continue to play catch-up with demand in the immediate term,” said Stephen Brennock of oil broker PVM. “In short, OPEC+ is intent on continuing to act as a key pillar of price support.”
Brent crude rose $0.11, or 0.1%, to $84.43 a barrel by 1213 GMT and US West Texas Intermediate crude slipped $0.08, or 0.1%, to $82.73. Both benchmarks touched multi-year highs on Monday.
Crude has surged in 2021 as economies recover from the Covid-19 pandemic, but prices are on track to fall this week, with Brent facing its first weekly decline in about two months.
This week’s US inventory figures showed crude stocks rose by a more-than-expected 4.3 million barrels.
Iran, meanwhile, has said that talks on reviving the international deal on its nuclear programme will resume by the end of November, bringing it a step closer to boosting oil exports.
“The sharp rise in US crude oil stocks and the expectation of nuclear talks being resumed with Iran have temporarily eased concerns about supply to some extent,” said Commerzbank’s Carsten Fritsch.
The heat also came out of the rally because of easing concern over high coal and natural gas prices that have spurred fuel switching in power generation.
British and European gas prices continued to fall on Friday after Russian President Vladimir Putin said Russia could start pumping gas into European storage.