Overview
Oil prices were steady on Friday but were heading for a weekly loss of 7% to 8% following reports of a potential increase in OPEC+ supply.
Current Market Trends
- Brent crude futures up 0.5% at $64.43 per barrel
- WTI crude futures up 0.53% at $60.80 per barrel
This week, Brent has accumulated an 8.1% decline, while WTI is on track for a 7.5% drop.
OPEC+ Supply Increase
Giovanni Staunovo, an analyst at UBS, stated that the market awaits OPEC+’s decision over the weekend. Sources told Reuters that OPEC+ might agree to increase oil production by up to 500,000 barrels per day (bpd) in November—triple the October increase. Saudi Arabia aims to regain market share.
Analysts from JPMorgan believe that September marked a turning point, and the oil market is heading towards a significant surplus in the fourth quarter and beyond.
Impact of Refinery Fire
A fire broke out at Chevron’s El Segundo refinery in California overnight, but county officials reported that flames were contained to a specific area. The refinery has a capacity of 290,000 barrels per day and is one of the largest on the U.S. West Coast.
It remains unclear if production was affected, but analysts suggest the impact on oil prices would be minimal. PVM’s Tamas Varga explained that El Segundo’s isolation from the rest of the U.S. oil flow makes its impact negligible.
Key Questions and Answers
- Q: What is causing the potential weekly loss in oil prices? A: Reports of a possible increase in OPEC+ supply, along with seasonal demand decline and refinery maintenance, are contributing to the weekly losses.
- Q: How much might OPEC+ increase production? A: OPEC+ is considering raising production by up to 500,000 barrels per day (bpd) in November.
- Q: What is the significance of the fire at Chevron’s El Segundo refinery? A: The fire occurred overnight, but it was contained to a specific area. Its impact on oil prices is expected to be minimal due to the refinery’s isolation from the rest of the U.S. oil market.
