Oil pared its weekly loss as Saudi Arabia cranked up prices for its global crude exports and the US demurred on a potential release of oil from the strategic reserve.
West Texas Intermediate (WTI) shaved its weekly loss to 2.75 percent, rising sharply late in the session on Friday, after Saudi Arabia raised the official selling price of all the nation’s crudes to buyers around the globe.
WTI for December delivery on Friday rose 3.12 percent to US$81.27 a barrel, while Brent crude for December delivery rose 2.73 percent to US$82.74 a barrel, declining 1.17 percent from a week earlier.
Saudi Arabia boosted its prices just days after refusing to concede to US pressure to pump more oil.
With the OPEC+ cartel unanimously agreeing to stick to its plans, attention now turns to whether US President Joe Biden will respond.
“The key focus for the market right now remains the US’ response to the OPEC+ meeting yesterday,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.
The increase in Saudi Arabian Oil Co prices suggests Saudi Arabia sees demand still improving, particularly in Asia where a resurgence in COVID-19 cases seeded doubt about the recovery’s strength, she added.
Oil has rallied to multiyear highs this year as major economies, including the US and China, recover from the COVID-19 pandemic, with BP PLC estimating global demand has rebounded above the pre-COVID-19 level of 100 million barrels a day.
A global energy crunch due to coal and natural gas shortages has exacerbated the tightness in the oil market and increased inflationary pressures in the US, prompting the Biden administration to seek ways to lower fuel costs.
Earlier on Friday, US Secretary of Energy Jennifer Granholm said that Washington is looking at a potential release from the Strategic Petroleum Reserve. Japan said it is in close contact with the US and the International Energy Agency as pressure from consumers grows.
For months, Biden has led calls for OPEC+ to add more barrels to tame high oil prices. The US was seeking an increase of as much as double the amount that was agreed, and has been among key consumers that previously raised the prospect of tapping their own strategic reserves if the alliance did not cooperate.
“Oil is not the problem,” Saudi Arabian Minister of Energy Prince Abdulaziz bin Salman said after the OPEC+ meeting on Thursday, citing natural gas shortages. “The problem is the energy complex is going through havoc and hell.”
Additional reporting by staff writer
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