An Aramco employee walks near an oil tank at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. REUTERS/Ahmed Jadallah/File Photo
Oil prices slipped on Friday but were on track to gain 2 percent for the week due to tight U.S. supply and expectations of strong fuel demand in China during the Golden Week holiday.
Brent December futures declined by 14 cents to $92.96 per barrel at 0620 GMT, while Brent November futures fell by 38 cents to $95.00 per barrel ahead of expiring on Friday.
U.S. West Texas Intermediate crude (WTI) dropped by 9 cents to $91.62 per barrel.
After a nearly 30-percent increase in prices this quarter, reaching their highest in a year, analysts are waiting to see if top producer Saudi Arabia will increase its supply.
“Brent struggled to hold onto gains made in the early part of the trading session. There is likely reluctance among participants to push too much higher right now with the market clearly in overbought territory,” said ING Bank analysts in a client note.
“There is also possible nervousness that OPEC+ and specifically Saudi Arabia could start to ease cuts earlier than scheduled if prices move much higher,” they added.
READ: Oil cut extension raises risk of Saudi economic contraction this year
Oct 4 OPEC+ meeting
A ministerial panel of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is scheduled to meet on Oct. 4.
“Next week’s OPEC meeting will be a key update for the market with increasing probability that the voluntary supply cuts by Aramco are reduced,” said National Australia Bank analysts in a client note.
READ: OPEC+ committee recommends to stay put on output policy
Improving macroeconomic data from China, the world’s largest oil importer, coupled with strong fuel demand as the country embarks on its week-long Golden Week holiday, limited price declines.
“(An) increase in international travel during the Golden Week holiday is boosting Chinese oil demand,” ANZ analysts said in a client note.
Domestic travel is also expected to boost demand, with data from flight app Umetrip showing the average number of daily flights booked is a fifth higher than for Golden Week in 2019, before COVID.
US economic growth
China’s factory activity likely steadied in September, according to a Reuters poll, adding to a series of indicators suggesting the
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