Oil prices rise for 2nd week as Red Sea tensions offset Angola-led OPEC worries
Investing.com-- Oil prices settled lower on Friday, but notched a second-weekly gain following a volatile trading week as traders weighed supply disruptions driven by attacks on vessels in the Red Sea, while Angola's exit from the Organization of Petroleum Exporting Countries sparked some concern about OPEC cohesion and its ability to wrangle members to unite behind future production agreements.
At 14:30 ET, West Texas Intermediate crude futures fell 0.2% to $73.73 a barrel, while Brent oil futures expiring in February fell 0.3% to $79.18 a barrel. Both benchmarks ended the week up 4%.
Crude oil settles higher for second-straight week
Crude prices wrapped up the day with a second-weekly gain, buoyed by the prospect of supply shortages as attacks by the Iran-aligned Yemeni Houthi group on vessels in the Red Sea saw several oil and shipping firms steer clear of the area.
The move points to potential delays in deliveries arriving through the Suez Canal, especially if the disruptions persist for more than a few weeks.
But sentiment was soured earlier this week as Angola exit from the OPEC raised concerns about the group's ability to unite behind future production cuts to raise prices. While Angola, which exited the oil producer group following clash on oil production quotas, accounts for a relatively small portion of the cartel’s overall output- about 1.1 million barrels per day (bpd) out of 28 million bpd produced by the whole group, the country's exit comes amid ongoing jitters about OPEC's cohesion.
Dollar slip to 5-month lows on cooling inflation offers support
A weaker dollar also offered support to the oil prices following data Friday showing that the PCE, the Fed's preferred measure of inflation, slowed by more than expected, adding to bets of aggressive rate cuts next year.
The personal consumption expenditures report, the Fed’s primary inflation gauge, for November slowed by 0.1%, taking the annualized rate through November to 2.6%, below expectations of 2.8%.
Investors are now expectations 175 basis points of by the end of next year, taking the Fed funds rate to a range of 3.5% to 3.75% range. That is much more aggressive the three rate cuts for 2024 the Fed projected at its December meeting.
Baker Hughes rig count rises
In a sign the record pace of crude output may be moderating, oilfield services firm Baker Hughe reported its weekly U.S. rig count fell by three to 398. The fall in rig counts come just a day earlier this week showed U.S. production reached a fresh record high.
Related Articles
Oil prices rise for 2nd week as Red Sea tensions offset Angola-led OPEC worries
Congo releases first provisional election results after messy vote
Union Pacific informed Mexican border railroad crossings to be reopened
