Oil made modest moves on Friday, with U.S. prices edging higher but holding near the fresh 17-month lows plumbed at the end of Thursday’s session and poised to settle with a weekly loss of more than 10%.
The oil market found some support from a report Saudi Arabia will cut more oil than first announced as part of an OPEC-led agreement.
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, plans to limit its output beginning early next year by more than it had initially committed to earlier this month, according to documents reviewed by The Wall Street Journal and reported Thursday. OPEC and some nonmember oil producers agreed in early December to collectively cut production by a total of 1.2 million barrels a day from October levels at the start of the new year, in response to a 30% price plunge from roughly four-year highs.
For its part, the Saudis now plan to cut production by 322,000 barrels a day, compared with a previously announced cut of 250,000 barrels a day, for six months starting in January. That would bring output in Saudi Arabia, the world’s largest exporter of crude, to no more than 10.311 million barrels a day.
Some analysts said the Saudi news kept oil futures from falling further.
“There are some indications of a recovery in early-Friday trade, following news that OPEC plans to publish country quotas but will stick to the 1.2 million barrel a day cut agreed on earlier this month,” analysts at consulting firm JBC Energy wrote in a note.
February West Texas Intermediate CLG9, +0.15% was up 32 cents, or 0.7%, at $46.20 a barrel on the New York Mercantile Exchange, though looking at a weekly loss of 10.2%. It fell nearly 5% to settle at $45.88 Thursday, the lowest finish since July 21, 2017, according to Dow Jones Market Data.
However, February Brent LCOG9, -0.53% the global benchmark, fell 55 cents, or 1%, at $53.80 a barrel, trading down 10.7% for the week. It fell more than 5% to end at $54.35 a barrel on ICE Futures Europe Thursday, marking the lowest settlement since September 12, 2017.
Oil futures have been under pressure this week, along with other perceived riskier assets, after the Federal Reserve hiked U.S. interest rates Wednesday. Some investors this week had been hoping for a more dovish outlook from the Fed on interest rates, with some even betting the central bank might hold off on this latest increase altogether, amid concerns over slowing global growth.
Later, Baker Hughes BHGE, -0.05% releases weekly data on the number of rigs drilling for oil in the U.S., a key metric of activity in the sector.
Meanwhile, the Trump administration has given Iraq permission to buy Iranian natural gas without penalty for at least three more months, after pledges from Baghdad to buy American oil and energy technology, U.S. and Iraqi officials said. The decision extends a 45-day waiver Iraq received from the U.S.’s Iran sanctions in November, as the country relies on Iranian natural gas for up to 45% of its electricity needs.
Natural gas traded in New York, meanwhile, continued to see volatile trading. January natural gas NGF19, +5.69% rose 12.4 cents, or 3.5%, at $3.707 per million British thermal units, looking to recoup much of Thursday’s 3.8% drop. For the week, it traded down more than 3%.
The EIA reported Thursday that domestic supplies of natural gas fell by 141 billion cubic feet for the week ended Dec. 14. Analysts polled by S&P Global Platts had forecast a decline of 145 billion cubic feet, on average.