Crude oil futures bounced back from three-month lows on Friday but still booked to a loss for the week, as the summer driving season gets underway with the Memorial Day holiday.
U.S. crude oil hit an intraday low of $76.15 in morning trading, the lowest level since Feb. 26. Global benchmark Brent fell to $80.65, the lowest level since Feb. 8.
The two benchmarks turned positive later in the session but settled at a weekly loss of 2.9% and 2.2%, respectively.
“Macroeconomic developments have been failing to provide meaningful support for oil, which has its own problems to deal with,” said Tamas Varga, analyst at oil broker PVM, pointing to Russia overproducing in April despite commitments to slash production along with other OPEC+ members.
OPEC and its allies, led by Russia, will hold a virtual meeting on June 2 to review production policy. A coalition of OPEC+ members is voluntarily holding 2.2 million barrels per day off the market to support prices.
“Next week’s OPEC meeting is widely expected to roll over the current production ceiling, especially now that oil prices are in a relentless downtrend,” Varga said.
“But it would probably not be enough to unambiguously brighten the mood, simply because there is nearly 6 mbpd of supply cushion attached to the seemingly oversupplied market,” the analyst said.
