Oil prices held steady on Friday but remained poised for weekly declines due to resurfacing concerns about excess supply, particularly as OPEC+ reportedly considers another output hike.
As of 07:40 ET (11:40 GMT), Brent crude futures edged up 0.2% to $64.56 per barrel, while West Texas Intermediate (WTI) futures rose 0.2% to $61.30. Despite the slight gains, both benchmarks were set to end the week nearly 2% lower.
OPEC+ Mulls More Output
Sources told Bloomberg News that OPEC and its allies (OPEC+) are evaluating whether to implement another production increase during their upcoming June 1 meeting. Delegates indicated that one scenario includes a 411,000 barrel-per-day boost in July, although no final agreement has been made.
Analysts at ING noted that such a move would signal a clear shift in OPEC+ strategy—from maintaining price levels to defending its market share. The group has already begun rolling back previous output cuts, with additional barrels hitting the market in May and June.
ING expects OPEC+ to follow through with the 411,000 bpd increase, stating that their oil price forecasts will remain unchanged if this occurs. They continue to project Brent crude averaging $59 per barrel in Q4. The front-month ICE Brent time spread also narrowed, declining from $0.74 to $0.50 per barrel—suggesting softening demand for near-term delivery.
Inventory Builds Add Pressure
Further weighing on oil prices was the latest data from the U.S. Energy Information Administration (EIA), which showed a surprise increase of 1.3 million barrels in U.S. crude stocks for the week ending May 16. Earlier in the week, the American Petroleum Institute (API) had also reported a 2.5 million barrel build, amplifying concerns about rising supply.
Eyes on U.S.-Iran Nuclear Talks
Markets also remained focused on the ongoing nuclear discussions between the U.S. and Iran, with the fifth round of negotiations taking place in Rome. Oman continues to act as a mediator in the talks.
The main sticking point is Iran’s uranium enrichment. The U.S. is pushing for a complete halt, while Iran insists on its right to enrich for peaceful purposes.
Progress in these talks could pave the way for a rollback of U.S. sanctions on Iran, potentially allowing Tehran to ramp up oil exports—further contributing to a possible global supply glut.
