Oil prices bounce on OPEC+ output reduction talk

 

Oil prices rose on Friday, recovering from their weakest levels of the year amid speculation that major producers could limit planned output increases if the market remains weak.

At 08:10 ET (13:10 GMT), Brent oil futures expiring in May rose 1.3% to $70.38 a barrel, while West Texas Intermediate (WTI) crude futures rose 1.4% to $67.26 a barrel.

OPEC+ Could Reverse Planned Output Hike

Concerns over increasing supply have pressured oil prices this week after the Organization of Petroleum Exporting Countries and its allies (OPEC+) voted to increase production next month. However, Russia’s Deputy Prime Minister, Alexander Novak, indicated earlier on Friday that OPEC+ could reverse its output hike after April if market conditions weaken.

Novak told reporters that the producer group will proceed with the April increase but may consider other steps afterward.

"If there is an imbalance in the market, we can always move in the other direction," he said.

Oil Heads for Weekly Loss

Despite Friday's gains, Brent and WTI futures are set to lose over 3% for the week, marking their third consecutive week in the red. The two contracts had been heading for their worst weekly drop since early October before the late-session rally.

Oil markets have been weighed down by U.S. President Donald Trump's decision to impose increased trade tariffs on several major economies, including China, the world’s top oil importer. The tariffs have sparked concerns that disruptions in global trade could dampen economic growth, ultimately hurting oil demand.

In retaliation, China imposed tariffs on U.S. goods, followed by Canada, while Mexico is expected to announce retaliatory measures on Sunday.

Impact on the U.S. and Canadian Oil Industries

The tariffs are also set to impact the U.S. and Canadian oil industries, though the U.S. has granted some exemptions for energy imports from Canada.

Additionally, data showing a larger-than-expected build in U.S. oil inventories further pressured oil prices, particularly amid rising concerns over slowing fuel demand.

This week, market focus remains on the U.S. economy, with nonfarm payrolls data for February, due later in the day, expected to provide additional insight.