Oil heads for 7th weekly loss with supply surplus, weak China demand
investing.comBy Paul Carsten
LONDON (Reuters) -Oil benchmarks were headed for a seventh straight weekly decline on worries over a global supply surplus and weak Chinese demand, although prices recovered ground on Friday after Saudi Arabia and Russia called for more OPEC+ members to join output cuts.
Brent crude futures were up $1.93, or 2.6%, at $75.98 a barrel at 0913 GMT, while U.S. West Texas Intermediate crude futures were up $1.82, or 2.6%, to $71.16 a barrel. Brent had earlier risen by $2.
Both benchmarks slid to their lowest since late June in the previous session, a sign that many traders believe the market is oversupplied. Brent and WTI are also in contango, a market structure in which front-month prices trade at a discount to prices further out.
OPEC+'s «weakening position in providing support coupled with record high US production and sluggish Chinese crude oil import figures can only mean one thing: there is an abundance of oil available, which is neatly reflected in the contangoed structure of the two pivotal crude oil benchmarks,» said Tamas Varga of oil broker PVM in a note.
Saudi Arabia and Russia, the world's two biggest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts for the good of the global economy, only days after a fractious meeting of the producers' club.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to a combined 2.2 million barrels per day (bpd) in output cuts for the first quarter of next year.
«Despite OPEC+ members' pledges, we see total production from OPEC+ countries dropping by only 350,000 bpd from December 2023 into January 2024,» said Viktor Katona, lead crude analyst at Kpler.
Some of the OPEC+ countries may
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