In this article, we will discuss the developments in the oil market and prices during the seventh consecutive week of decline. U.S. data indicates support for oil demand forecasts, but prices continue to drop due to ongoing concerns about an oversupply. Brent crude oil futures settled at $75.84 per barrel, up $1.79 or 2.4%, while U.S. light crude oil futures settled at $71.23 per barrel, up $1.89 or 2.7%. During the week, both contracts lost 3.8% after reaching their lowest level since late June, suggesting that many traders believe the market is facing an oversupply. Additionally, Chinese customs data revealed that crude oil imports in November fell by 9% year-on-year due to high inventory levels, weak economic indicators, and declining crude demand from independent refiners. However, the price gains on Friday, the first in six sessions, could signal that the market has found a temporary bottom after six consecutive days of decline. Phil Flynn, an analyst at Price Futures Group, stated: “Exercise caution, but the bottom should be in.”
Fuel Demand Forecast
Data from the U.S. Department of Labor showed stronger-than-expected job growth, indicating labor market strength that should support fuel demand in the largest oil market. This came after government data on Wednesday showed that U.S. gasoline demand last week lagged the 10-year seasonal average by 2.5% and gasoline inventories rose by 5.4 million barrels, more than five times expectations, leading to a decline in gasoline prices. Similar to crude oil, RBOB gasoline futures rose about 3% from two-year lows on Thursday. Rob Haworth, senior investment strategist at U.S. Bank Asset Management, commented: “The EIA report that raised concern about weak demand amid a large increase in gasoline inventories may be less alarming in light of the strong jobs report.”
Saudi Arabia and Russia Call for Production Cuts
Meanwhile, Saudi Arabia and Russia, the world’s largest oil exporters, called on all OPEC+ members on Thursday to join in a production cut agreement following a tense meeting of the producers’ club just days prior. The Organization of the Petroleum Exporting Countries and its allies agreed last week to cut output by 2.2 million barrels per day in the first quarter of next year. However, the market expressed concerns that some members may not adhere to their commitments.
In this way, the article can be divided into the following sections:
1. Oil prices rise over 2% but register a seventh week of weekly decline
This section provides a summary of the developments in the oil market and prices during the seventh consecutive week of decline. The current prices of Brent crude oil and U.S. light crude oil contracts are mentioned, along with the reasons behind this weekly decline and ongoing concerns about oversupply.
2. Fuel demand forecast
This section discusses the impact of strong U.S. job data on fuel demand forecasts in the largest oil market. It mentions gasoline demand data and inventory levels, and how the EIA report that raised concerns about weak demand amid a significant increase in gasoline inventories might be less troubling in light of the strong jobs report.
3.
Saudi Arabia and Russia’s Call to Cut Production
This section highlights the call from Saudi Arabia and Russia for all OPEC+ members to join the production cut agreement. The agreement reached between the Organization of the Petroleum Exporting Countries and its allies is mentioned, along with concerns regarding adherence to the commitments of the agreement.
In this way, the article is comprehensively covered and divided into subsections that help organize the information and provide a smooth and understandable reading experience.
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