Oil Set for Weekly Gain as Supply Uncertainty Shadows Outlook
Oil is headed for its biggest weekly gain since early January on rising supply uncertainty, and support from a weaker U.S. dollar.
Brent crude held above $76 a barrel, and rose more than 2% this week for its biggest gain since Jan. 10, while West Texas Intermediate approached $72. OPEC+ could delay an output increase, with Kazakhstan’s output remaining disrupted after a Ukrainian drone attack on Russia, while the status of a resumption of exports from Iraq’s Kurdistan region is unclear.
OPEC+ delaying a 120,000-barrel-per-day increase — a move flagged as possible by delegates — would mark the fourth time the group has delayed plans to revive production that has been stalled since 2022. The alliance currently aims to restore a total of 2.2 million barrels per day in monthly increases, starting in April.
“OPEC’s ability to unwind production cuts without disrupting the oil market is increasingly elusive,” ANZ Group Holdings analysts Daniel Hynes and Soni Kumari said in a note. “Given the economic and geopolitical uncertainties and the need to support oil prices, we expect OPEC to hold off.” A weaker dollar also makes commodities more attractive to many buyers. Bloomberg’s U.S. currency gauge fell to its lowest since December on Thursday.
Oil has had a bumpy ride this year, battered by U.S. President Donald Trump’s swift tariff actions and broader policy decisions, as well as questions over global supply.
The threat of U.S. tariffs on imports, or other disruptive actions on trade that could hurt global growth, has caused futures to erase much of their early gains this year. Elsewhere, the U.S. has signaled that sanctions relief for Russia could be on the table in talks over the war in Ukraine. Treasury Secretary Scott Bessent said Washington was prepared to increase or remove sanctions based on the Kremlin’s willingness to negotiate.
Source: Bloomberg
