May 22, 2024
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OIL & GAS

Oil Prices Gain 2% as Iraq Supports OPEC+ Cuts

Oil prices experienced a 2% uptick on Friday, boosted by Iraq expressing support for OPEC+’s oil cuts ahead of an upcoming meeting, and as short positions were covered amid weekend uncertainties. However, despite the rebound, prices closed the week with a 4% decline, marking their third consecutive weekly drop.

In a report published by Reuters, Price Futures Group analyst Phil Flynn noted that the week witnessed significant short positions, with some covering ahead of the weekend. “This was the perfect technical storm. We came into this week with an almost record short position and now we’re seeing some short covering going into the weekend.”

Flynn noted that in addition to Iraq’s comments, Saudi Arabia and Russia confirmed this week that they would continue oil output cuts through year end.

Reuters also reported that in the U.S., the number of oil rigs decreased for the second consecutive week to its lowest point since January 2022, according to energy services firm Baker Hughes, indicating potential future output reductions.

Analysts highlighted that worries about demand have now taken precedence over concerns related to potential production outages linked to the Middle East conflict.

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