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Oil Poised for 2% Weekly Gain on Fed Cut Bets, Ukraine and Venezuela Risks

Saudi price cuts to Asian buyers highlight a lingering glut that caps advances.

An oil pump at sunrise near Midland, Texas, U.S., May 3, 2017. Picture taken May 3, 2017. REUTERS/Ernest Scheyder

Overview

  • Brent traded near $63 and WTI hovered around $59–$60 in early Friday dealings, putting both benchmarks on track for roughly a 2% weekly rise.
  • A Reuters poll found 82% of economists expect a 25-basis-point Federal Reserve rate cut next week, lifting demand expectations for crude.
  • Ukraine diplomacy showed no breakthrough after talks in Moscow, with Ukrainian negotiators set for discussions in Florida and Vladimir Putin rejecting parts of a US-backed plan.
  • Markets are watching Venezuela after President Donald Trump signaled action against drug traffickers very soon, with Rystad Energy warning up to 1.1 million bpd of output could be at risk.
  • Saudi Aramco cut its January Arab Light price to Asia to a five-year low, reinforcing signals of oversupply that analysts say could revive a bearish trend.