Oil Prices were mixed on Friday after a boost from a drop in U.S. crude and gasoline inventories. They were set for a weekly decline on concerns that an OPEC+ impasse could swell global crude supplies. Brent crude Oil futures were down 9 cents, or 0.1%, at $74.03 a barrel by 0140 GMT. U.S. West Texas Intermediate futures were up 1 cent at $72.95 a barrel
Both benchmarks were headed for a loss of nearly 3% for the week, as traders remained worried that the collapse of talks between the Organization of the Petroleum Exporting Countries and allies including Russia, a group is known as OPEC+, could lead to a rise in crude supplies.Hiroyuki Kikukawa, general manager of research at Nissan Securities said that a large decline in the U.S. stockpile reinforced views that fuel demand was growing as the U.S. driving season began. Since there has not been any major lift in the U.S. shale output, some investors became bullish despite the OPEC+ spat.
The U.S. Energy Information Administration said on Thursday that U.S. crude and gasoline stocks fell and gasoline demand reached its highest since 2019, signaling increasing strength in the U.S. economy.Crude inventories fell by 6.9 million barrels in the week to July 2 to 445.5 million barrels, the lowest since February 2020, and more than the expected 4 million-barrel drop estimated in a Reuters poll.
Gasoline stocks fell by 6.1 million barrels, exceeding expectations for a 2.2 million barrel drop. Even with Oil Prices rising toward $75 a barrel, U.S. shale producers are keeping their pledges to hold the line on spending and keep output flat, a departure from previous boom cycles.
Many trade members of the OPEC+ group could be tempted to abandon output limits that they have followed during the pandemic due to the breakdown in discussions between major Oil producers Saudi Arabia and the United Arab Emirates. The two Gulf OPEC allies are at odds over a proposed deal that would have brought more Oil to the market.