Oil prices edged up on Friday but were set for their third weekly decline as Saudi Arabia and Russia, members of the Organization of Petroleum Exporting Countries and its allies (OPEC+), expressed their readiness to pause or reverse output cut agreements.
Brent crude futures for August delivery rose 0.25 percent to $80.07 per barrel, while West Texas Intermediate (WTI) crude futures increased 0.30 percent to $75.78 per barrel as of 5:07 GMT.
OPEC+ reassurance
Oil prices found support in the latest supply agreement from OPEC+. In a meeting on Sunday, the organization agreed to extend its voluntary production cut of 2.2 million barrels of crude oil per day into 2025 but allowed the easing of voluntary cuts for eight members. This extension follows the last decision to cut 3.66 million barrels per day in 2022 and 2023 in a bid to support oil prices by countering slowing demand and rising output from the United States.
On Thursday, oil prices also jumped on reassurances from Saudi Arabia and Russia. However, they are gearing up for their third weekly decline after analysts saw the organization’s output decision as bearish for prices. Meanwhile, other experts expressed that OPEC+ may need to further cut output to support oil prices as demand declines while supply remains sufficient.
Read: Key factors influencing gold, crude oil performance in H1 2024
Interest rate cuts to boost demand
The European Central Bank announced its first interest rate cut since 2019 on Thursday, which supported the case for a Federal Reserve rate cut soon. In addition, the Bank of Canada cut interest rates from 5 percent to 4.65 percent, marking the country’s first cut in four years. Lower interest rates traditionally boost demand for oil, thus supporting its prices.
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