Home Oil and Gas Brent crude oil price hits $73bpd as Iraq respects oil to reach $80

Brent crude oil price hits $73bpd as Iraq respects oil to reach $80

by Business News Report

Oil futures rose on Friday, reversing early losses and set for a fourth week of gains after OPEC sources said the producer group expected limited U.S. oil output growth this year despite rising prices. Officials at the Organization of the Petroleum Exporting Countries got the U.S. production outlook from industry experts, OPEC sources said. This would give the producer group more power to manage the market before a potential surge in shale output in 2022. Brent crude futures rose 43 cents, or 0.6% to settle at $73.51 a barrel. U.S. West Texas Intermediate crude rose 60 cents, or 0.8% to $71.64 a barrel. Both benchmarks were headed for a weekly gain of about 1.1%.

“Oil markets are rallying because OPEC is skeptical that the increase in U.S. oil production is going to be enough to change their plans to support prices,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. On Wednesday, Brent settled at its highest price since April 2019 and WTI closed at its highest since October 2018. Gains were capped by lingering concerns about the pandemic and a stronger U.S. dollar, which makes oil more expensive in other currencies. Sources told Reuters that on Tuesday, officials from OPEC’s Economic Commission Board (ECB) and external presenters attended a meeting focused on U.S. output. OPEC heard from more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday. While there was general agreement on limited U.S. supply growth this year, an industry source said for 2022 forecasts ranged from growth of between 500,000 and 1.3 million barrels per day.

“The general sentiment regarding shale was it will come back as prices go up but not super fast,” said a source at one of the companies that provided forecasts to OPEC. Higher oil prices have spurred some U.S. energy firms back to the well pad. The oil rig count, an early indicator of future output, rose eight this week to 373, the highest since April 2020, according to energy services firm Baker Hughes Co. On Thursday, Iran’s top negotiator indicated an agreement was close in talks between Tehran and Washington on reviving the 2015 Iran nuclear deal. This added to pressure on prices.

Meanwhile Iraq expects oil prices to reach $80 per barrel, the country’s state news agency reported on Sunday, citing an oil ministry spokesman. The spokesperson, Asim Jihad, did not give a timeframe for the increase he predicted. Crude prices have been on the rise over the past weeks, settling over $70/barrel on Friday, amid expectations of limited growth in U.S. oil output this year.

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