- Friday’s oil prices surged and they are currently on track to record their largest weekly gain in seven years.
- WTI crude oil futures rose by around 12% in the week that centered around the OPEC+ summit.
- Barclays expects a more favorable environment for energy prices than before OPEC+ reduced output by 2,000,000 barrels per day.
Friday’s oil prices were poised to record their largest weekly gain in seven month. The agreement made by OPEC+ members this week to reduce output should encourage further energy price increases, Barclays stated.
Friday’s session will be closed. West Texas Intermediate crudeFutures rose 1.1%, to $89.39/barrel Brent oilThe international benchmark for monetary performance, grew by 1% to $95.36.
WTI was poised to record a five-day winning streak, and the largest weekly increase in prices since March. Prices were up around 12%. Brent futures extended their gains into a fifth session. They were also looking at a weekly gain of more than 8.8%.
Oil prices rose in anticipation of the decision by OPEC+ 23 members to reduce oil production in Vienna on Wednesday. This was to stop a price slide. The group decided to Reduce its output quota to 2 million barrels per dayBeginning in November, the largest reduction since the COVID-19 virus outbreak spread worldwide in 2020.
“Westerly disappointment at the 2mbbl/d reductions announced this week is understandable, as it directly complicates inflation issues. “Lower supply will likely broadly offset lower demande as the economy cools,” Barclays’ European equities team, led by Emmanuel Cau, stated in a Friday note.
It does improve our Energy [overweight]However, higher and longer energy prices are recommended to continue to fuel earnings as well as cash flows at energy names.
The US market is dominated by the S&P 500 Energy Sector The only sector that has seen a significant increase in its year-to-date performance is the apparel industry, which saw a rise of around 50%. S&P 500That’s a lot higher than the average for the year.
“We reiterate Energy’s unique ability to protect portfolios from inflation and geopolitics while its fundamentals are healthy. This view is at risk due to a reduction in Russia-Ukraine hostilities, and the reopening energy links,” Barclays stated.
After Russia’s invasion in February, oil prices soared to $130 a barrel. However, prices have declined as demand worries have lowered oil prices. Central banks have increased borrowing rates in an effort to slow down economic activity.
