Crude Oil Prices were able to gain slightly on Friday and settled with a half percent intraday gain. However, on a weekly basis drop over four and half percent as investors weighed expectations for higher global supply against fresh stimulus from top crude importer China.
Brent crude oil futures LCOc1 settled 0.53%, at $71.89 per barrel. Front-month U.S. West Texas Intermediate crude futures CLc1 settled up 0.75%, at $68.18.
On a weekly basis, Brent settled down around 3%, while WTI fell by around 5%.
China’s central bank on Friday lowered interest rates and injected liquidity into the banking system, aiming to pull economic growth back toward this year’s target of roughly 5%.
More fiscal measures are expected to be announced before Chinese holidays starting on Oct. 1 after a meeting of the Communist Party’s top leaders showed an increased sense of urgency about mounting economic headwinds.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, will go ahead with plans to increase production by 180,000 bpd each month starting from December, two OPEC+ sources said.
A Financial Times report on Wednesday said the planned increase is due to Saudi Arabia’s decision to abandon a $100 oil price target and gain market share.
Saudi Arabia has repeatedly denied targeting a certain oil price, and sources at the wider group told Reuters that the plans to raise output from December do not represent any major change from existing policy.
And more barrels can be expected to enter the global market, after rival factions staking claims for control of the Central Bank of Libya signed an agreement to end their dispute on Thursday. The row had seen crude exports fall to 400,000 barrels per day (bpd) this month from more than 1 million last.
In the U.S., some operators have begun to resume operations in the Gulf of Mexico after Hurricane Helene made landfall in Florida on Thursday night, with Chevron CVX.N on Friday redeploying personnel and restoring production at company-operated platforms.
Meanwhile, the destruction of the hurricane, counted as the seventh most powerful to slam into Florida, could weigh on fuel demand in the state, which is the third-largest gasoline consumer in the U.S.
Meanwhile, U.S. consumer spending edged higher in August in a sign that the world’s largest economy carried on momentum in the third quarter, as inflation pressures steady.
The U.S. Federal Reserve cut interest rates by half of a percentage point last week, kicking off what was expected to be a steady easing of monetary policy.
Putting a floor on prices, Lebanon’s caretaker Prime Minister Najib Mikati said Israel’s attacks on Beirut’s southern suburbs on Friday show it “does not care” about efforts to bring about a ceasefire.
Rising tensions in the Middle East could pose a threat to global crude supplies.
Technical Outlook – Crude Oil Futures
Crude oil prices settled with a minor gain of 0.55%, closed at 5694 compared to the previous day’s close of 5663. Since September 24, prices have been trading under pressure, retreating from a peak of 6069 to a low of 5627.
The recent price action has resulted in the formation of a bullish harami candlestick pattern, which is a potential trend reversal signal. However, for a full recovery, the price must break above the immediate resistance at 5820 to target the next levels of 5890-5955.
On the downside, if the price breaks the support at 5605, it is expected to drop towards 5520-5450, completing the fifth wave within the subminuette corrective wave pattern.
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