By Katya Golubkova
TOKYO (Reuters) – Oil prices rose on Friday, continuing to climb after OPEC+ members Saudi Arabia and Russia said they were ready to suspend or cancel production deals and a decline interest rates in Europe has raised the prospect of a similar decision in the United States.
Brent crude futures rose 16 cents or 0.2% to $80.03 a barrel and U.S. West Texas Intermediate crude futures rose 16 cents or 0.2% to $75.03 a barrel. $71 at 00:07 GMT.
Prices rebounded on Thursday as Saudi Arabia and Russia tried to reassure markets about supply deals. However, they are heading for a weekly loss after analysts took Sunday’s OPEC+ meeting as indicating an increase in supply, which is bearish for prices.
OPEC+, the Organization of the Petroleum Exporting Countries and its allies including Russia, agreed to extend most production cuts until 2025, but left open the possibility that eight members’ voluntary cuts could be gradually rolled back .
Participating in an event in Russia alongside Russian Deputy Prime Minister Alexander Novak on Thursday, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ could suspend or cancel voluntary production increases if it decides that the market was not strong enough.
“We are ready to respond quickly to market uncertainties,” Novak said at the event, adding that the price drop after the weekend meeting was due to a misinterpretation of the agreement and “factors speculative.
Jarand Rystad, founder and chief executive of consultancy Rystad Energy, told Reuters that OPEC+ would likely persist in managing the market, but that “further cuts may be necessary as demand slows slightly while supply remains sufficient unless adjustments are made.”
“The sweet spot for OPEC+ is in the price range we have seen – between 80 and 70 (in US dollars per barrel). Although some Russian volumes have been cut off from the market due to sanctions and attacks of drones, the impact remains manageable,” he said.
The European Central Bank made its first interest rate cut since 2019 on Thursday, raising expectations among analysts that the U.S. Federal Reserve would follow suit. Lower rates boost demand for oil.
Market participants will wait for the release of Chinese commodity trade data on Friday for an indication of the direction of demand from the world’s second-largest oil consumer after the United States, analysts at ANZ Research in a client note.
(Reporting by Katya Golubkova; editing by Christopher Cushing)
