Oil futures rose Friday, on track for solid weekly gains attributed in large part to Saudi Arabia’s decision to unilaterally slash crude output.
West Texas Intermediate crude for February delivery
rose 66 cents, or 1.3%, to $51.49 a barrel on the New York Mercantile Exchange. March Brent crude
the global benchmark, was up 80 cents, or 1.5%, at $55.18 a barrel on ICE Futures Europe. Both benchmarks were up more than 6% for the week.
Saudi Arabia on Tuesday took traders off guard by announcing it would cut output by 1 million barrels a day in February and March. The move came after a protracted meeting of OPEC+ — made up of the Organization of the Petroleum Exporting Countries and a Russian-led alliance of non-OPEC producers — that saw the group agree to largely stick to its existing output curbs, while allowing Russia and Kazakhstan to boost output by a combined 75,000 barrels a day.
“Saudi Arabia is clearly fully committed to supporting oil prices through these turbulent months and has no desire to risk another price collapse in the pursuit of short term gains,” said Craig Erlam, senior market analyst at Oanda, in a note.
Meanwhile, Russia’s determination “not to lose market share has been taken into consideration, meaning the two big players have got what they want out of the deal,” Erlam said. “It’s not a solution that’s sustainable in the long term but it’s a decent plaster to see the group through this severe — and hopefully final — wave of COVID-19.”
The U.S. saw at least 4,111 deaths on Thursday from COVID-19, the most in a single day since the start of the outbreak, according to a New York Times tracker, and counted a record of at least 280,028 new cases, also a record. In the last week, the U.S. has averaged 237,607 cases a day, after experts warned that infections could accelerate if Americans traveled in large numbers during the recent holiday season