The comment during U.S. President Joe Biden’s Middle East visit comes at a time when spare capacity at members of the Organization of the Petroleum Exporting Countries (OPEC) is running low.
“Part of the support (today) is that everybody and their brother who digs down into the Saudi situation see that they don’t have a lot of capacity left,” said John Kilduff, partner at Again Capital LLC in New York.
Brent crude futures were up $2.40, or 2.4%, to $101.50 a barrel by 12:57 p.m. EDT (1657 GMT), while West Texas Intermediate crude rose $2.41, or 2.5%, to $98.19.
Both benchmarks are on track for their biggest weekly percentage drops in about a month, largely on fears earlier in the week that a nearing recession would chop away at demand. Brent moved towards its third weekly drop, while WTI headed for its second weekly decline.
Summary
- Oil headed for its biggest weekly percentage drops in a month
- Biden begins sensitive Saudi trip
- U.S. oil rig count inches up by two this week – Baker Hughes
NEW YORK, July 15 (Reuters) – Oil was up 2.5% on Friday after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.
The comment during U.S. President Joe Biden’s Middle East visit comes at a time when spare capacity at members of the Organization of the Petroleum Exporting Countries (OPEC) is running low.
“Part of the support (today) is that everybody and their brother who digs down into the Saudi situation see that they don’t have a lot of capacity left,” said John Kilduff, partner at Again Capital LLC in New York.
Brent crude futures were up $2.40, or 2.4%, to $101.50 a barrel by 12:57 p.m. EDT (1657 GMT), while West Texas Intermediate crude rose $2.41, or 2.5%, to $98.19.
Both benchmarks are on track for their biggest weekly percentage drops in about a month, largely on fears earlier in the week that a nearing recession would chop away at demand. Brent moved towards its third weekly drop, while WTI headed for its second weekly decline.
Biden, prompted by energy and security interests,arrived in Jeddah on Friday and had been expected to call for Saudi Arabia to pump more oil.
But the United States does not expect Saudi Arabia to immediately boost oil production and is eyeing the outcome of the next OPEC+ meeting on Aug. 3, a U.S. official told Reuters.
The United States could still secure a commitment that OPEC will boost production in the months ahead in hopes that it will provide a signal to the market that supplies are coming if necessary.
“(Biden’s) case will have been weakened significantly by the latest price rout,” said Stephen Brennock of oil broker PVM.
Meanwhile, the U.S. oil rig count, an early indicator of future output, inched up by two to 599 this week to their highest since March 2020, energy services firm Baker Hughes Co said.
The U.S. Federal Reserve’s most hawkish policymakers on Thursday said they favoured a rate increase of 75 basis points at its policy meeting this month, not the bigger increase traders had priced in after a report on Wednesday showed inflation was accelerating.
