NEW YORK: Oil prices rose on Friday, reversing early losses after OPEC sources said the producer group expected limited US oil output growth this year despite rising prices. OPEC officials got the US production outlook from industry experts, OPEC sources said. This would give the group more power to manage the market in the short term before a potential surge in shale output in 2022.
Brent crude futures rose 38 cents, or 0.5% to $73.47 a barrel by 12:17 p.m. (16:17 GMT). US West Texas Intermediate (WTI) crude futures were up 67 cents, or 0.93% to $71.71 a barrel. Both benchmarks were on track for a weekly gain of about 1%.
"Oil markets are rallying because OPEC is skeptical that the increase in US oil production is going to be enough to change their plans to support prices," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
On Wednesday, Brent settled at its highest price since April 2019, while WTI settled at its highest since October 2018. Prices retreated a bit on Thursday as the US dollar strengthened, making oil more expensive in other currencies.
Sources told Reuters that on Tuesday, officials from OPEC's Economic Commission Board (ECB) and external presenters attended a meeting focused on US output. OPEC heard from more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday.
While there was general agreement on limited US supply growth this year, an industry source said for 2022 forecasts ranged from growth of 500,000 bpd to 1.3 million bpd.