OIL PRICES CLOSE WEEK LOWER

OIL PRICES settled down $2 a barrel on Friday and ended the week markedly lower, as traders worried that future US interest rate hikes could weigh on demand and got nervous about mounting signs of ample crude and fuel supply.

On Thursday, two US Federal Reserve (Fed) officials warned additional hikes in borrowing costs were essential to curb inflation. The sentiments lifted the dollar, making oil more expensive for holders of other currencies.

Brent crude futures settled down $2.14 or 2.5%, to $83 (about R1 496) a barrel, falling 3.9% week on week. West Texas Intermediate (WTI) US crude settled down $2.15, or 2.7%, to $76.34 a barrel, falling 4.2% from last Friday’s settlement.

Russian oil producers expect to maintain current volumes of crude oil exports, despite the government’s plan to cut oil output in March, the Vedomosti newspaper said on Friday, citing sources familiar with companies’ plans.

The latest snapshot of US supplies, released last Wednesday, showed crude inventories in the week to February 10 rose by 16.3 million barrels to 471.4 million barrels, their highest level since June 2021.

“Because oil storage is at a 19 month high, refiners are going to stretch out turnaround season for as long as they can,” said Bob Yawger, director of energy futures at Mizuho, on Friday.

Heating oil cracks fell 5% on Friday as warm weather sapped demand for the fuel in mid-February.

The oil and petrol rig count, an early indicator of future output, fell by one to 760 in the week to February 17, energy services firm Baker Hughes said on Friday.

Despite this week’s rig decline, Baker Hughes said the total count was still up 115, or 18%, over this time last year.