NEW YORK: Oil prices edged lower on Friday on rising supplies from major producers and concerns over a mixed picture on the COVID-19 pandemic’s impact on fuel demand. Brent crude futures for June fell 10 cents, or 0.2%, to $63.09 a barrel by 11:30 EST (1630 GMT). US West Texas Intermediate (WTI) crude for May was at $59.50, also down 10 cents.
Both contracts are on track for a 2%-3% drop this week but still far from a low of $60.47 hit two weeks ago.
Downward pressure has been exerted by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to increase supplies by 2 million barrels per day between May and July.
“Favorable oil demand prospects are being largely offset by the expected increase in OPEC + production that could be approximating 2 million barrels per day by the end of July,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Renewed lockdowns in some parts of the world and problems with vaccination programs could threaten the oil demand picture.
Stephen Innes, chief global markets strategist at Axi, said oil prices are expected to trade in a range between $60 and $70 as investors weigh these factors.
Talks to bring Iran and the United States fully back into the 2015 nuclear deal are making progress, delegates said on Friday, but Iranian officials indicated disagreement with Washington over which sanctions it must lift.
“Oil is currently in a wait and see mode, with market participants looking at the vaccination pace to understand when oil demand will recover further and at nuclear talks in Vienna to see when more Iranian barrels might come back,” said UBS commodity analyst Giovanni Staunovo.
Energy services firm Baker Hughes is expected to announce active US oil rig data Friday at 1 p.m. EST.
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