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Tuesday, May 17, 2022

Oil Prices On Track For Weekly Gains of 2% Ahead of U.S. Shale Production Data

Oil Prices On Track For Weekly Gains of 2% Ahead of U.S. Shale Production Data© Reuters. Traders take profit in crude oil after strong weekly gains

Investing.com – Oil prices moved lower on Friday in European morning trade as investors took profit after strong weekly gains as they turned their attention to data on U.S. shale production
New York-traded fell 13 cents, or about 0.2%, to $71.23 a barrel by 3:59AM ET (7:59GMT).

Meanwhile, , the benchmark for oil prices outside the U.S., traded down 26 cents, or roughly 0.3%, to $77.21 a barrel.

Despite Friday’s drop, U.S. crude was on track for weekly gains of around 2.2%, while Brent was up 3.2% on the week.

Bulls piled into black gold this week as President Donald Trump announced that the U.S. would withdraw from the Iran nuclear deal, reimposing sanctions on Tehran.

The sanctions, which are expected to reduce global supply, come amid an oil market that has already been tightening due to strong demand, especially in Asia, and as top exporter Saudi Arabia and top producer Russia have led efforts since 2017 to withhold oil supplies to prop up prices.

Some analysts have commented that the impact may be lessened if other members of the Organization of the Petroleum Exporting Countries (OPEC) step in to replace the potential supply disruption.

Meanwhile, oil traders will also continue to weigh a steady increase in U.S. production levels as the rise in U.S. drilling marked one of the few factors tamping back crude in an otherwise bullish environment.

Later on Friday, Baker Hughes will release its most recent data on .

Last week’s data showed that U.S. drillers added nine oil rigs, bringing the total count to 834, the highest number since March 2015.

That was the fifth consecutive weekly increase in the rig count, underscoring worries about rising U.S. output.

Indeed, domestic oil production – driven by shale extraction – rose to an all-time high of 10.62 million barrels per day (bpd) last week, the Energy Information Administration (EIA) said.

Only Russia currently produces more, at around 11 million bpd.

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Source: Investing.com

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