By Jessica Resnick-Ault
NEW YORK (Reuters) - Oil futures rose on Friday, reversing early losses and set for a fourth week of gains after OPEC sources said the producer group expected limited U.S. oil output growth this year despite rising prices.
Officials at the Organization of the Petroleum Exporting Countries got the U.S. production outlook from industry experts, OPEC sources said. This would give the producer group more power to manage the market before a potential surge in shale output in 2022.
Brent crude futures rose 43 cents, or 0.6% to settle at $73.51 a barrel. U.S. West Texas Intermediate (WTI) crude rose 60 cents, or 0.8% to $71.64 a barrel.
Both benchmarks were headed for a weekly gain of about 1.1%.
"Oil markets are rallying because OPEC is skeptical that the increase in U.S. 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 and WTI closed at its highest since October 2018. Gains were capped by lingering concerns about the pandemic and a stronger U.S. dollar, which makes 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 U.S. 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 U.S. supply growth this year, an industry source said for 2022 forecasts ranged from growth of between 500,000 and 1.3 million barrels per day.
"The general sentiment regarding shale was it will come back as prices go up but not super fast," said a source at one of the companies that provided forecasts to OPEC.
Higher oil prices have spurred some U.S. energy firms back to the well pad. The oil rig count, an early indicator of future output, rose eight this week to 373, the highest since April 2020, according to energy services firm Baker Hughes Co.
On Thursday, Iran's top negotiator indicated an agreement was close in talks between Tehran and Washington on reviving the 2015 Iran nuclear deal. This added to pressure on prices.
(Additional reporting by Noah Browning in London, Sonali Paul in Melbourne and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David Gregorio)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU