Oil Up on Tight Supply as Attention Turns to OPEC+ Meeting
2022.07.29 07:34
By Zhang Mengying
Investing.com – Oil was up on Friday morning in Asia. Investors now focus on the Organization of the Petroleum Exporting Countries and allies (OPEC+)’s meeting next week, where the bloc will decide the oil output.
Brent oil futures inched up 0.03% to $101.86 by 10:12 PM ET (2:12 AM GMT) and crude oil WTI futures jumped 0.28% to $96.69.
Brent is set to climb nearly 5% for the week in its second straight weekly gain, while WTI is on track for a nearly 3% rise for the week, recouping the previous week’s losses.
“Oil prices have little chance of (posting) deep losses on the back of a weak U.S. dollar and the ongoing supply crunch,” CMC Markets analyst Tina Teng told Reuters.
The dollar is softening, which usually leads to a rise in oil as a weaker dollar makes crude cheaper for buyers holding other currencies.
Now investors have shifted their focus to the Organization of the Petroleum Exporting Countries and allies (OPEC+)’s meeting on August 3 as the bloc is about to end its 2020 output reduction pact.
According to Reuters, OPEC+ sources said the group will consider keeping oil output unchanged for September, but two OPEC+ sources also said a modest increase would be discussed.
A senior U.S. administration official said on Thursday said extra supply would help stabilize the market and the government was optimistic about the meeting.
However, analysts were less optimistic as many of the OPEC+ producers have difficulties boosting supply due to a lack of investment in oil fields.
“OPEC production is constrained, though supplies are stabilizing in Libya and Ecuador. Under-investment in many member countries will keep production constrained,” ANZ Research analysts said.
