Oil prices are set for a weekly fall despite recent gains

Crude oil prices will end the week with losses due to concerns about demand and a hypothetical increase in supply.

Prices started the day higher following news that Iran may be planning a retaliatory strike against Israel’s latest attack and that a retaliatory strike could take place this weekend, according to Israeli intelligence sources cited by the media.

The attack was reportedly to be carried out from inside Iraq using drones and ballistic missiles.

Following the news, indices rose, with Brent crude trading at $74.16 per barrel at the time of writing, and West Texas Intermediate crude changing hands at $70.63 per barrel.

However, prices remain subject to downward pressure and the prospect of OPEC+ bringing back nearly 200,000 bpd of supply from next month is front and center in traders’ minds, although there are doubts the group will actually restore any supplies.

Earlier this week, Reuters, citing unnamed sources close to OPEC+, reported that the cartel was considering delaying a planned easing of production cuts due to price conditions. “The December increase may be delayed because the market is not healthy enough,” one of the sources told the publication.

OPEC+ collectively holds back about 5.86 million barrels of oil per day. The December pullback was planned at 180,000 bpd, but if prices remain vulnerable the rollback will be delayed. The delay will be at least a month, three Reuters sources said. In fact, the time frame could be longer, as OPEC+ has made it abundantly clear that it will not simply continue to return supplies to the market unless prices are high enough to justify such a return.

Meanwhile, prices remain volatile. “Even though the crude oil market looked to post gains for a third straight day, it was unable to fully overcome the large gap to the downside that followed Monday’s reopening,” IG analyst Tony Sycamore told Reuters.

Going forward, the main factors influencing oil will be the US presidential election and China’s new stimulus package.

Irina Slav for Oilprice.com

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