Oil prices were slightly up on Friday, as the market looked ahead to this weekend’s meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) and the likelihood of an increase in output for next month.
Brent crude gained 50 cents or 0.7 per cent to close at $68.30 per barrel and the US West Texas Intermediate (WTI) crude increased by 50 cents or 0.75 per cent to trade at $66.50 per barrel.
OPEC+ may increase oil output for August at its meeting on Saturday that is larger than the 411,000 barrels per day hikes it made for May, June and July.
Eight members of the group namely Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria are scheduled to meet online on Saturday to decide their oil output policy for August.
They started to unwind their most recent output cut of 2.2 million barrels per day starting in April, and then accelerated the hikes in May, June and July to 411,000 barrels per day for each month, despite the extra supply weighing on crude prices.
The output hikes came after some OPEC+ members, such as Kazakhstan, produced way over their targets, angering other members that were sticking more closely to agreed cuts.
The 22-member alliance is seeking to expand its market share against the backdrop of growing supplies from other producers like the US. It already pumps about half of the world’s oil.
As of their decision for July output, the eight-member sub-group have made or announced production increases of 1.37 million barrels per day . This is 62 per cent of the production cut of 2.2 million barrels per day that they are unwinding.
The market is also looking at implications of US President Donald Trump’s massive budget which was signed into law at a ceremony at the White House on Friday.
Also, the US is reportedly planning to resume nuclear talks with Iran next week.
Traders also weighed uncertainty over US tariff policy with the end of a 90-day pause on higher levies approaching and some economies are yet to make progress yet.
Barclays said it had raised its Brent oil price forecast by $6 to $72 a barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved demand outlook.