Oil Ends Week Lower, But Reclaims $80 on Bets Supplies to Remain Tight

  • Investing.com
  • Commodities News
Oil Ends Week Lower, But Reclaims $80 on Bets Supplies to Remain Tight
Credit: © Reuters.

By Yasin Ebrahim

Investing.com – Crude settled higher Friday, as bullish bets resumed amid expectations major oil producing nations will continue to allow surging oil prices to go unchecked after voting to keep production steady earlier this week.

On the New York Mercantile Exchange crude futures for January delivery gained 2.46 to settle at $81.27 a barrel, while on London’s Intercontinental Exchange (NYSE: ICE ), Brent added $2,2 to settle at $82.74 a barrel.

Expectations the U.S. could tap its strategic petroleum reverses to curb the spike in energy prices – following OPEC and its allies’ decision to keep production – were quickly dismissed, reinforcing expectations that oil supplies will remain tight.

“In our opinion, however, the idea that this would prompt the US – as some have speculated – to release some of its strategic oil reserves is not very likely, and will ultimately be up to the US president to decide,” Commerzbank (DE: CBKG ) said in a note.

OPEC and its allies including Russia on Thursday pledged to stick with plans to gradually raise oil production by 400,000 barrels a day next month.

The unchanged decision had irked the White House, prompting a spokesperson to suggest the administration was prepared to use a range of tools to respond to the surging gas prices.

In a further sign pointing to tighter output, oilfield services firm Baker Hughes Co (NYSE: BKR ) reported its weekly U.S. rig count rose by six to 550. Rising rig counts, pointing to signs of tightening crude output, did little to calm worries about concerns about tightening supplies outlook.

The supply and demand imbalance will come into focus next as the Energy Information Administration and OPEC publish their monthly reports next week.

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