Oil gains on OPEC outlook that U.S. output growth will slow
MELBOURNE (Reuters) - Oil futures reversed earlier loses on Friday, and were set to close a fourth week of gains after OPEC sources said the producer group expected limited US oil output growth this year despite rising prices.
Officials at the Organization of the Petroleum Exporting Countries got the U.S. production outlook from industry experts, OPEC sources said. This would give the producer group more power to manage the market in the short term before a potential surge in shale output in 2022.
Brent crude futures rose 31 cents, or 0.3% to $73.39 a barrel by 1:40 p.m. (1740 GMT). US West Texas Intermediate (WTI) crude was were up 43 cents, or 0.6% to $71.47 a barrel.
On Wednesday, Brent settled at its highest price since April 2019 and WTI closed at its highest since October 2018. But gains were capped by lingering concerns about the COVID-19 virus and a stronger US dollar, which makes oil more expensive in other currencies.
Sources told Reuters that on Tuesday, officials from OPEC's Economic Commission Board (ECB) and external presenters attended a meeting focused on U.S. output. OPEC heard from more forecasters on the outlook for 2021 and 2022 at a separate meeting on Thursday.
While there was general agreement on limited U.S. supply growth this year, an industry source said for 2022 forecasts ranged from growth of between 500,000 and 1.3 million barrels per day.
Higher oil prices have spurred some U.S. energy firms back to the well pad. The oil rig count, an early indicator of future output, rose eight this week to 373, the highest since April 2020, according to energy services firm Baker Hughes Co said.
Adding to market worries were remarks from Iran's top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.
