Oil Up 2nd Week in Row as OPEC Again Raises Output Marginally vs Demand

NEW YORK (Sputnik) - Crude prices rose for a second week in a row after oil exporters’ alliance OPEC+ announced just a meager hike in production amid Europe’s evolving intent to ban import of Russian oil.

Brent crude, the London-traded global benchmark for oil, settled Friday’s trade up $1.49, or 1.3%, at $112.39 a barrel. For the week, Brent rose 2.8%, extending last week’s gain of 0.8%.

New York-traded West Texas Intermediate, or WTI, finished Friday’s session up $1.51, or 1.4%, at $109.77. The benchmark for US crude climbed 4.9% for the week, after a 2.6% rise in the prior week.

This week’s gains in oil came in the wake of the decision by OPEC+ to agree to another monthly production hike of around 400,000 barrels per day that has become inconsequential to the market’s supply-demand picture.

OPEC+ has managed to push crude prices up during every monthly meeting of the alliance this year by offering production hikes at well below demand, after the disruptions to oil supply caused by the long-running coronavirus pandemic and the Ukraine crisis.

Crude prices had initially started this week on weak footing, with Brent struggling to hold at $103 and WTI almost falling to below $100, as the US crude benchmark threatened to reprise last week’s lows of around $95.

But as Thursday’s meeting of the OPEC+ loomed, the market rebounded.

Mohammad Barkindo, secretary-general of the original OPEC group, had added to the market’s fervor by saying that it was not possible for other oil producers in OPEC+ to replace Russian exports of more than 7 million barrels per day. "The spare capacity just does not exist," he said as the European Union inched toward a full ban of Russian energy products in the aftermath of the Ukraine crisis.

Crude prices also rose after weekly inventory data on Wednesday from the Energy Information Administration showed the stockpile in the US emergency crude reserve at a 20-year low as the Biden administration continued to release oil from there to a supply-starved market.