By Adedapo Adesanya
Oil finished its worst month of the year on Friday, May 31, ahead of a meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) this weekend during which the cartel will review its production levels.
Brent futures lost 24 cents or 0.3 per cent to trade at $81.62 a barrel, and the US West Texas Intermediate (WTI) crude futures fell by 92 cents or 1.2 per cent to finish at $76.99 per barrel.
For the week, Brent depreciated by 0.6 per cent, while WTI posted a 1 per cent loss.
Meanwhile, the global crude benchmark, Brent, fell by 7.1 per cent last month and the US oil finished May 6 per cent lowest, its worst performance since November.
OPEC+ members on Sunday are expected to review voluntary output cuts of 2.2 million barrels per day.
Saudi Arabia invited ministers to gather in person in Riyadh for the June meeting in a last-minute change of plans, sources said on Friday but Reuters reported that the gathering is still officially scheduled as an online meeting.
Demand for gasoline (petrol) in the US has been relatively weak, with the daily demand average for fuel 1.4 per cent lower in the run-up to Memorial Day compared with the year-ago period.
Oil demand has been lacklustre due to a warm winter that reduced heating oil demand and the Federal Reserve’s indications that interest rates will remain higher for longer.
US crude production rose in March to its highest level this year, data from the US Energy Information Administration (EIA) showed on Friday, while fuel product supplied, a proxy for demand, fell 0.4 per cent to 19.9 million barrels per day.
Oil prices rose briefly after U.S. government data showed inflation tracked sideways in April, strengthening traders’ bets that the US Federal Reserve would deliver a long-awaited rate cut in September. The anticipated core personal consumption expenditures price index, which the US central bank uses to gauge underlying price pressures, rose 0.2 per cent in April from March, following a 0.3 per cent increase the prior month.
Eurozone inflation rose more than expected in May. However, the increase is unlikely to deter the European Central Bank (ECB) from cutting borrowing costs next week, but it could slow the rate-cutting cycle.
Energy services firm Baker Hughes said in its closely followed report on Friday that US energy firms held oil and gas rig count – an early indicator of future output – steady at 600 in the week to May 31.