Crude oil prices are on course to end the week with a loss, weighed down by demand concerns and a hypothetical increase in supply.
Prices started the day trending higher following the news that Iran may be planning its retaliation against Israel’s latest attack and that the retaliatory strike could take place over this weekend, according to Israeli intelligence sources, cited by media.
Per the reports, the attack was going to be carried out from Iraq and involve drones and ballistic missiles.
The benchmarks ticked up following the news, with Brent crude trading at $74.16 per barrel at the time of writing, and West Texas Intermediate changing hands at $70.63 per barrel.
Still, prices remain susceptible to downward pressure, with the prospect of OPEC+ bringing back close to 200,000 bpd in supply from next month front and center in traders’ minds—even though there are doubts the group will indeed bring any supply back.
Earlier this week Reuters reported, citing unnamed sources close to OPEC+ as saying the cartel was considering a delay in the planned easing of production cuts because of the price environment. “The December hike could be postponed as the market is not healthy enough,” one of the sources told the publication.
OPEC+ is collectively withholding some 5.86 million barrels daily in oil supply. The December rollback was planned at 180,000 bpd but if prices remain vulnerable, the rollback is going to be delayed. According to three of the Reuters sources, the delay would be at least a month. In fact, it could be longer because OPEC+ has made it abundantly clear it would not simply proceed with the return of supply on the market unless prices are high enough to justify such a return.
Meanwhile, prices remain volatile. “Despite the crude oil market looking to lock in a third straight day of gains, it has been unable to completely erase the large gap lower that followed Monday’s re-open,” IG analyst Tony Sycamore told Reuters.
Looking ahead, the top factors affecting oil will be the U.S. presidential election and China’s new stimulus package.
By Irina Slav for Oilprice.com
