Crude oil heads for third straight weekly loss as supply and demand weigh on market

Crude oil futures rose Friday but are on pace for a third straight weekly loss on worries that demand may be softening even as OPEC+ plans to increase production.

U.S. crude oil and global benchmark Brent sold off earlier in the week after OPEC+ members announced that they would start phasing out 2.2 million barrels per day in production cuts starting in October. Poor U.S. manufacturing data and weak private payrolls also weighed on the market.

Oil prices have bounced back over the past two days on hopes that lower rates might boost demand, but the two crude benchmarks are still down more than 1% for the week.

Here are today’s energy prices:

• West Texas Intermediate July contract: $76.01 a barrel, up 46 cents, or 0.6%. Year to date, U.S. oil is up 6%.
• Brent August contract: $80.28 a barrel, up 41 cents, or 0.5%. Year to date, the global benchmark is ahead by 4.2%.
• RBOB Gasoline July contract: $2.41 per gallon, up 0.6%. Year to date, gasoline futures are higher by 14.7%.
• Natural Gas July contract: $2.85 per thousand cubic feet. Year to date, gas has risen 13.2%.

The OPEC+ production increase would start when refineries are down for fall maintenance and then ramp up as demand typically weakens heading into winter.

Still, oil market analysts have widely described this week’s sell-off as an overreaction, noting that the OPEC+ production increase does not start until October. In the meantime, oil balances should tighten as the cuts remain in place during the summer driving season when demand typically rises, according to JPMorgan.

JPMorgan and Barclays have said oil demand growth remains relatively healthy.

Analysts at JPMorgan, Deutsche Bank and RBC Capital Markets have also said OPEC+ is likely to pause any production increases if the market deteriorates substantially and cannot absorb additional barrels.