Prices for oil fluctuated on Friday, after briefly soaring close to $1 per barrel in the wake of concerns about a slowing of demand due to cooling US economic activity and supply uncertainties.
Brent crude oil futures traded lower by 5 cents which is 0.1 percent in value, at $110.00 barrels by 0310 GMT at 0310 GMT, while U.S. West Texas Intermediate (WTI) crude futures were trading up 19 cents equivalent to 0.2 percent, to $104.46 per barrel. The prices fell by about 1.5 percent during the previous session.
Crude futures fell back into sell mode following U.S. manufacturing and services PMIs were well below expectations, as did an increase in German manufacturing data according to Stephen Innes, the managing partner at SPI Asset Management.
“Under these conditions, higher crude oil prices will become super sensitive to any perceived or otherwise increased supply inputs,” Innes stated Innes noted indications of Russian crude affecting the oil complex, and increasing demand on OPEC to increase output.
OPEC and its allied producers including Russia are likely to stick with the plan of accelerated production increases during August with the aim of easing the price of crude and inflation. U.S. President Joe Biden plans to travel to Saudi Arabia, sources said.
The group called OPEC+ decided in its June 2 meeting to increase production by 648,000 barrels per day during July, which is 7 percent of the global demand as well as by exactly the same quantity in August, an increase from the initial target to increase production by 432,000 barrels a day for three months up to September.
But, the group has been struggling to meet the monthly targets for an increase due to the insufficient investment in oilfields of some OPEC members, and most recently, declines in Russian production.
Weekly estimates for U.S. oil inventories were set to go out on Thursday. However, technical problems could delay the figures until next week according to said the U.S. Energy Information Administration stated, but without any specific timeframe.