Oil Price Fundamental Daily Forecast – Limited OPEC+ Output Helps Offset US Supply Rise Concerns

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures inched higher on Friday as the markets regained some of their lost momentum from earlier in the week.

Helping to keep a lid on prices were concerns over rising U.S. supply and the possibility of fresh supply from Iran in the future. Underpinning prices were expectations that the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, known as OPEC+, would maintain production cuts.

On Friday, December WTI crude oil futures settled at $83.22, up $0.41 or +0.50% and January Brent crude oil finished at $83.72, up $0.06 or +0.07%.

Potentially Bearish Factors Cap Gains

Crude oil gains were capped last week by a report from the government that showed U.S. crude stocks rose by 4.3 million barrels during the week-ending October 22.

Additionally, Iran said talks on reviving the international deal on its nuclear program will restart by the end of November, bringing it a set closer to boosting oil exports.

Limited Output Expectations from OPEC+ Supportive

An OPEC+ committee largely stuck to forecasts of a strong demand rebound this year and next ahead of a meeting next week, at which the group is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December, according to Reuters.

The Joint Technical Committee (JTC), which met on Thursday, now expects oil demand to grow by 5.7 million bpd in 2021, 120,000 bpd below OPEC’s forecast in its latest monthly report, two OPEC+ sources said.

The JTC left its demand forecast for next year steady at 4.2 million bpd, one of the sources said.

OPEC+ forecasts are still higher than those of the International Energy Agency (IEA), which expects oil demand to grow by 5.5 million bpd in 2021 and 3.3 million bpd in 2022.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies – collectively known as OPEC+ – meet on November 4 to decide policy.

US Drillers Add Oil and Gas Rigs for 15^th month in a Row – Baker Hughes

U.S. energy firms added oil and natural gas rigs for a 15^th month in a row in October as oil prices soared to fresh seven-year highs, prompting some drillers to return to the wellpad.

For the week, the oil and gas rig count, an early indicator of future output, rose two to 544 in the week to October 29, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report Friday.

That was the seventh time the rig count increased in the past eight weeks. The total rig count was still up 248, or 84%, over this time last year.

U.S. oil rigs rose one to 444 this week, while gas rigs also gained one to 100, their highest since mid-September.

For the month, the number of active oil rigs rose by 23, putting the total count up for a 14^th month in a row for the first time since July 2017.