Oil Heads for Weekly Loss Amid Tariff Row, OPEC+ Watch
The global oil market is bracing for a potential weekly loss, with prices sliding amid escalating trade tensions and a looming output hike from the Organization of the Petroleum Exporting Countries (OPEC) and its allies. As of Friday morning, Brent crude futures were trading at $63.89 a barrel, down 26 cents, or 0.41%, while US West Texas Intermediate (WTI) crude fell 27 cents, or 0.44%, to $60.67 a barrel.
The whipsawing tariff rulings in the US have added to the market’s anxiety, with oil prices struggling to find direction. The ongoing trade tensions between the US and other major economies, including China and the European Union, have led to increased concerns about global economic growth and energy demand.
The latest developments in the trade war have seen the US impose new tariffs on a range of Chinese goods, including oil products, in a move that has sparked retaliatory measures from Beijing. The escalating dispute has led to a decline in trade volumes and a slowdown in global economic growth, which has in turn impacted oil demand.
Meanwhile, OPEC and its allies, known as OPEC+, are expected to make a decision on their output levels at their meeting next week. The cartel is under pressure to increase production to meet growing global demand, but is also mindful of the potential impact on the market of a sudden surge in supply.
OPEC+’s current deal to cut output by 1.2 million barrels per day (bpd) is set to expire in March, and the group is expected to discuss its next move at the meeting. Analysts are divided on the outcome, with some expecting OPEC+ to increase production to meet growing demand, while others believe the cartel will maintain its current output levels.
“A combination of factors, including the ongoing trade tensions and the uncertainty surrounding OPEC+’s output decision, is likely to keep oil prices volatile in the coming weeks,” said a senior analyst at a leading energy consulting firm.
The market is also keeping a close eye on the US Energy Information Administration’s (EIA) latest inventory report, which is due to be released on Wednesday. The report is expected to show a decline in crude oil inventories, which could support oil prices.
Despite the recent decline, oil prices are still up around 10% since the start of the year, driven by a combination of factors including the ongoing supply disruptions in Libya and the OPEC+ output cuts. However, the market remains cautious, with many analysts expecting prices to remain volatile in the coming weeks.
In the meantime, oil producers are bracing for the potential impact of the OPEC+ output decision on their production levels. The cartel’s largest member, Saudi Arabia, is expected to play a key role in the decision-making process, and is likely to push for a production increase to meet growing demand.
Meanwhile, the US shale industry is also keeping a close eye on the OPEC+ output decision, with many producers expecting the cartel to increase production. The US shale industry has been a major driver of oil production growth in recent years, and is expected to continue to play a key role in the global oil market.
In conclusion, the oil market is bracing for a potential weekly loss amid the escalating trade tensions and the looming OPEC+ output decision. While the market remains cautious, many analysts believe that oil prices will remain volatile in the coming weeks, driven by a combination of factors including the ongoing supply disruptions and the uncertainty surrounding the OPEC+ output decision.
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