U.S. West Texas Intermediate crude oil futures are edging higher in a mixed trade on Friday. Pressuring prices early in the session was OPEC+’s decision to raise production targets slightly more than planned. Nonetheless, the market remains underpinned by tight global supply and rising demand due to China’s easing of COVID restrictions.
The U.S. benchmark is on track for a sixth weekly gain on tight U.S. supply, which has prompted talk of fuel export curbs or a windfall tax on oil and gas producers.
Expectations that supply will stay tight is underpinning prices early Friday. This is probably because OPEC and its allies under-delivered.
OPEC+ divided its output increase across its members and still included Russia, whose output is falling due to sanctions and some buyers avoiding its oil over the invasion of Ukraine, suggesting the boost will undershoot the level that the market needs to overcome the supply shortage.
Heightened Volatility is New Theme
Today’s relatively calm trade is a stark contrast to Thursday’s volatile session that saw prices soar more than 1% following early weakness after U.S. crude inventories fell more than expected amid high demand for fuel. Thursday’s rally took place despite OPEC+’s agreement to boost crude output to compensate for a drop in Russian production.
Market Starts Week on Strong Note
U.S. West Texas Intermediate crude oil futures opened the week sharply higher…