Oil prices little changed in thin trading Friday
Oil prices were up slightly in thin trading on Friday and weekly losses for oil were on track for a drop of about 2 per cent as investors remained concerned over the crude glut.
WTI crude futures were up 3 cents to $47.73 by 11:24 a.m. EDT, set for a more than 2 per cent loss on the week. About 225,000 WTI contracts changed hands, lower than average.
Brent crude was down by 4 cents to $50.54, also falling about 2 per cent this week.
For the last two weeks, oil prices have dropped after a number of US inventory reports show that OPEC output cuts were not effective in reducing the global oversupply.
But on Thursday, a Saudi energy ministry official told Reuters that the kingdom’s crude exports to the US in March would drop by about 300,000 b/d from February, adding those levels would be held for the coming few months.
The drop in Saudi exports to the US could help lower record-high US crude inventories that stood at 533 million barrels last week.
Saudi exports to Asia are higher, despite the OPEC supply cut pact.
Analysts are concerned that if the OPEC deal is not extended past June, oil prices may continue to fall.
“OPEC’s goal of drawing down inventories to normal levels is not going to be reached before their agreement expires on June 30,” U.S. investment bank Jefferies said in a note to clients.
This weekend the OPEC committee monitoring the cuts will meet in Kuwait and many are watching to see any hints of a possible extension of the OPEC agreement.
On Friday, privately owned Russian oil companies are saying they are now in favor of the OPEC deal after originally opposing the pact.
Shale production in the United States has increased oil production by over 8 per cent since mid-2016 to just above 9.1 million b/d. A Reuters report today showed that producers have left a record number of wells unfinished in the Permian, a sign that output may not rise as swiftly as drilling activity would indicate.
The Baker Hughes rig count shows US rigs up by 20 to 809.
