Oil Heads to First Weekly Loss Since April

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Oil prices.

Oil prices dropped for a fourth consecutive session on Friday and were set for their first weekly decline in three weeks, weighed down by renewed supply pressure from another possible OPEC+ output hike in July, Reuters reported on Friday, 23 May 2023.

Brent futures fell 48 cents, or 0.8%, to $63.96 a barrel by 0635 GMT. U.S. West Texas Intermediate crude futures lost 48 cents, or 0.8%, to $60.72, according to the Reuters report.

For the week, Brent has fallen 2.3%, and WTI has dropped 2.9%, following two weeks of gains, the report added.

Both contracts touched their lowest in more than one week on Thursday after a Bloomberg News report indicated that OPEC+ was considering another large production increase at a meeting on June 1.

Increasing output by 411,000 barrels a day (bpd) for July was among the options discussed, but no final agreement has yet been reached, the report said, citing delegates.

"The oil market is under renewed pressure as noise builds around what OPEC+ will do with their July output levels," ING analysts wrote in a research note, according to Reuters. They expect that OPEC+ will go ahead with a 411,000 bpd supply increase for July and currently forecast Brent to average $59 per barrel in the fourth quarter.

OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to increase production by nearly 1 million barrels per day (bpd) in April, May and June.

A large crude oil build in the U.S. also weighed on oil prices, according to Reuters. As traders brace for a flood of increased supply in coming months from OPEC+, U.S. crude oil storage demand has surged in recent weeks to levels similar to the COVID-19 pandemic, according to data from storage broker The Tank Tiger.



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