Although demand is close to pre-pandemic levels, OPEC + oil-producing countries rejected the US call to accelerate production. Crude oil prices closed higher on Friday, driven by renewed supply concerns.
Brent crude oil rose US$2.20 to US$82.74 per barrel, while US West Texas Intermediate (WTI) crude oil rose US$2.46 to US$81.27.
The Organization of Petroleum Exporting Countries and allies including Russia (collectively referred to as OPEC+) agreed on Thursday to stick to their plan to increase oil production by 400,000 barrels per day starting in December. US President Joe Biden has called for increased production to cool rising prices.
Bob Yawger, director of Mizuho Energy Futures, said that OPEC’s decision to stay the course and the Biden administration did not make a substantive response has allowed oil prices to continue to rise.
Yawger added that only by working with China and other countries can the problem of oil shortage on the market be solved.
The White House said it would consider all available tools to ensure affordable energy, including the possibility of releasing oil from the Strategic Petroleum Reserve (SPR).
Data showed that US employment growth in October exceeded expectations, which also boosted confidence.
Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a report: “The market knows that the release of strategic reserves will only have a temporary bearish effect on immediate prices, and it is not a lasting solution to the imbalance between supply and demand.”
Brent crude oil fell for the second consecutive week, down about 2%, while WTI fell 2.7%.
Vice President Ann-Louis Hitler said: “Although the winter is very cold-which may push more oil for heating-which may support prices, it is difficult for Brent crude oil to break through the $87 mark,” Consulting The oil research of the company Wood Mackenzie pointed out that despite the high price of the former, the conversion capacity of natural gas to oil is limited.