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Brent crude futures for April, which expired on Friday, fell 75 cents in the session, or 1.1 per cent, to settle at $66.13 a barrel. The more actively traded May contract slipped by $1.69 to $64.42.
Oil prices fell on Friday as the US dollar rose while forecasts called for crude supply to rise in response to prices climbing above pre-pandemic levels.
US West Texas Intermediate (WTI) crude futures settled $2.03, or 3.2 per cent lower at $61.50 per barrel.
Brent crude futures for April, which expired on Friday, fell 75 cents in the session, or 1.1 per cent, to settle at $66.13 a barrel. The more actively traded May contract slipped by $1.69 to $64.42.
The dollar rose as US government bond yields held near one-year highs, making greenback-priced oil more expensive for holders of other currencies.
However, Brent rose 4.8 per cent and WTI ended up 3.8 per cent on the week, and both were about 20 per cent higher in the month on supply disruptions in the United States and optimism over demand recovery on the back of Covid-19 vaccination programmes.
“It’s a dicey time – it doesn’t seem like a time to load up on a risk-asset position,” said Bob Yawger, director of Energy Futures at Mizuho in New York, wary of a potential output increase from OPEC and allies at next week’s meeting.
Also, the US stockpile report this week showed a surprise build in oil inventories. [EIA/S]
Investors are betting that next week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply returning to the market.
US crude production fell in December, the latest month for which data is available, according to a monthly report from the Energy Information Administration [EIA/PSM]
Despite talk of tightening fundamentals, the demand side of the market is nowhere near warranting current oil price levels, some analysts said.
US crude prices also face pressure from slower refinery demand after several Gulf Coast facilities were shuttered during the winter storm last week.
Refining capacity of about 4 million barrels per day (bpd) remains shut and it could take until March 5 for all capacity to resume, though there is risk of delays, analysts at J.P. Morgan said in a note this week.
Hedge funds and other money managers raised their net long US crude futures and options positions in the latest week to February 23, the US Commodity Futures Trading Commission (CFTC) said.
REUTERS
