On Friday, both US and UK crude oil futures had clocked modest gains as both contracts had reported their fourth straight weekly percentage gains in a row, mostly boosted up over an OPEC view that a recent rise in US crude output would slow down during second half of the year despite soaring oil prices.
In point of fact, sources familiar with the 14-member Organization of Petroleum Exporting Countries (OPEC) were quoted as saying in a press agency report later last week that the OPEC had curated US production outlook from industry insiders, while the US oil production would more likely to be curbed out deeper into the year, eventually spurring up investors’ optimism that a lowering of US crude output would proffer adequate time for OPEC member states to rebalance the global crude oil market before a likely boom in US shale production as early as by 2022.
While both US and UK crude contracts soared following reveal of the press agency report and registered their fourth straight weekly gains as beforementioned despite an increase in US drilling rigs last week as cited by the US oil services provider Baker Hughes, Wall Street analysts wrote in a client report last week that Brent Crude futures would likely to test $80 per barrel by Q3, 2022.
Oil prices rise in light of OPEC view that US output-surge would slow
Citing statistics, on Friday’s commodity market wind-down, UK crude futures added 0.60 per cent to settle down at $73.51, while US WTI (West Texas Intermediate) crude oil futures’ prices gained 0.80 per cent to $71.64 a barrel.
On the week, both contracts had added 1.1 per cent. Meanwhile, referring to a precise embedding of an accommodative OPEC policy measure, a senior analyst at Price Futures Group in Chicago, Phil Flynn said, “Oil markets are rallying because OPEC is sceptical that the increase in U.S. oil production is going to be enough to change their plans to support prices. ”