Oil futures gained on Friday, with U.S prices rebounding a bit from the one-month low they settled at a day earlier, but the commodity remains on track to post a second consecutive weekly decline.
The expiration of U.S. waivers on Iran oil sanctions Thursday, along with ongoing political turmoil in Venezuela, has led to the possibility of tighter global crude supplies. U.S. production, however, continues to stand at record levels.
Traders also question whether Saudi Arabia, the de-factor head of the Organization of the Petroleum Exporting Countries, will decide to help make up for any oil lost from the market, or move to extend a production-cut agreement with major producers that’s due to expire at the end of June.
U.S.-based West Texas Intermediate crude for June delivery CLM9, +0.86% was up 57 cents, 0.9%, at $62.38 a barrel, and on track for a weekly loss of 2.4%. It settled at $61.81 on the New York Mercantile Exchange Thursday, the lowest since April 1, according to Dow Jones Market Data.
Global benchmark July Brent crude LCON9, +0.86% rose 45 cents, 0.6%, to $71.20 a barrel on ICE Futures Europe. It dropped below $70 on Thursday but finished at $70.75, the lowest for a front-month contract since April 9. It is heading for a roughly 2% weekly drop.
“Crude prices remain vulnerable on concerns OPEC [and their allies] will not be able to maintain a meaningful production cut agreement going forward and on the backdrop that we are likely to see increases in production from the U.S., Saudis and Russians,” said Edward Moya, senior market analyst at OANDA.