Oil Prices Rise as Producers Talk Up Efforts to Rein in Supply

EghtesadOnline: Oil prices climbed on Friday, on track for a third consecutive weekly gain, pulled higher by major oil producers’ efforts to hold back output amid concerns about economic recovery from the coronavirus pandemic.

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22 August 2020

US West Texas Intermediate crude futures rose 13 cents, or 0.3%, to $42.95 per barrel, on track for a 2% rise for the week. Brent crude futures were up 17 cents, or 0.4%, at $45.07 per barrel, heading for a 0.5% rise for the week, CNBC reported.

Both benchmark contracts fell around 1% on Thursday on economic concerns after weekly US jobless claims came in higher than expected.

An internal report by the Organization of the Petroleum Exporting Countries and allies, showed the group known as OPEC+ was focused on ensuring that members who had overproduced against their commitments would cut their output, as flagged following an OPEC+ meeting on Wednesday.

Reuters reported that OPEC+ found some members would need to slash output by 2.31 million barrels per day to make up for their recent oversupply.

“But with enforcement tactics reduced to merely public smearing of laggards or a very unlikely disbanding of the agreement, the proof will need to be in the pudding as it remains critical that non-compliant members toe the line to bring the markets closer to equilibrium,” said AxiCorp market strategist Stephen Innes.