Oil heads for weekly gain as investors seek clues on OPEC output
TOKYO and SEOUL (Bloomberg) -- Oil headed for its first weekly gain since mid-May as investors weighed mixed signals from OPEC members about whether the group and its allies will increase output.
Futures in New York were little changed, up 0.4% this week. While Saudi Arabia and Russia have signaled they’re ready to raise production, Iraqi Oil Minister Jabbar al-Luaibi told Reuters an output boost isn’t on the table when the group gathers in Vienna on June 22. The meeting may end in failure due to misaligned positions of member countries and the need of unanimity for any decision, according to Sanford C. Bernstein & Co.
Crude rose above $72 in late May after U.S. President Donald Trump’s decision to renew sanctions on Iran and plunging output in Venezuela raised concerns over potential supply shortages. Since then, prices have receded about 8% as the Organization of Petroleum Exporting Countries and its allies flirt with the possibility of easing their supply curbs as U.S. shale producers continue to pump record volumes.
“The views are so widely different among OPEC members that they’ll probably fail to reach an agreement at the meeting later this month,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone in Seoul. “Prices are likely to seesaw without any clear direction as uncertainties rise in the market.”
West Texas Intermediate for July delivery climbed as much as 24 cents to $66.19/bbl on the New York Mercantile Exchange and traded at $66.06 at 11:06 a.m. in Tokyo. The contract rose 1.9% to $65.95 on Thursday. Total volume traded was about 42% below the 100-day average.
Brent futures for August settlement added as much as 29 cents, or 0.4%, to $77.61/bbl on the London-based ICE Futures Europe exchange. Prices on Thursday gained $1.96 to $77.32. The global benchmark traded at a $11.27 premium to WTI for the same month.
