Oil prices climbed on Friday, extending gains beyond $1 per barrel, following comments by Russia’s Deputy Prime Minister Alexander Novak suggesting that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) may consider reversing its oil output hike after April if market conditions warrant such a move.
Brent crude futures rose by $1.18, or 1.70%, to $70.64 per barrel at 11:23 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.11, or 1.67%, to $67.47 per barrel.
Despite these gains, both benchmarks remained on track for their largest weekly losses in months due to concerns over rising crude inventories and OPEC+ supply decisions.
Novak confirmed that OPEC+ would proceed with the planned April production increase of 138,000 barrels per day (bpd) but emphasized that the group remained flexible and could reconsider the move depending on market conditions.
Novak stated, “If there is an imbalance in the market, we can always play in the other direction,” suggesting that supply adjustments might be necessary to stabilize prices.
Market analyst, Harry Tchilinguirian, a senior oil strategist at Onyx Capital Group noted that OPEC+ appeared confident in the oil market’s ability to absorb additional barrels, but the price reaction indicated otherwise.
“When examining the global oil balance, OPEC+ must have deemed in its assessment that it was sufficiently constructive that the oil market could absorb extra barrels without undue negative influence on the price … so far, it seems the price action has proved them wrong.”
Harry Tchilinguirian, a senior oil strategist at Onyx Capital Group
Despite Friday’s gains, Brent crude remains down 3.6% for the week, marking its largest weekly decline since mid-November. Similarly, WTI crude is set to finish the week 3.4% lower, its biggest weekly drop since late January.
This price decline was largely triggered by a combination of factors, including a surge in U.S. crude inventories, which raised concerns about oversupply, OPEC+’s decision to increase output quotas, which was seen as a potential risk to market stability, and uncertainty in global demand, as markets weigh the impact of economic conditions on energy consumption.
Brent crude prices fell earlier in the week to their lowest levels since December 2021 after data showed an increase in U.S. crude stockpiles.
Future Market Outlook
Analysts believe that the future trajectory of oil prices will largely depend on whether OPEC+ sticks to its plan of gradually winding down voluntary production cuts.
The group’s conditionality clause, which ties production decisions to market conditions, suggests that output hikes could be paused if prices continue to fall.
“The caution expressed by Mr. Novak is simply another way of reiterating OPEC+’s conditionality clause relative to ‘market conditions’.
“These conditions will dictate whether they keep or not to the plan of incrementally winding down their voluntary cuts.”
Harry Tchilinguirian, a senior oil strategist at Onyx Capital Group
The uncertainty surrounding oil prices has also led some analysts to speculate that the OPEC+ increase could be paused or reversed after the initial April addition.
According to Tamas Varga, an analyst at oil broker PVM, oil prices and tariff policies will play a significant role in shaping future production decisions.
The global oil market remains highly volatile, with price movements dictated by a mix of supply and demand fundamentals, geopolitical developments, and OPEC+ policy decisions.
While the group has committed to its April production increase, Russia’s latest remarks suggest that adjustments could be made if market conditions deteriorate further.
Investors and industry stakeholders will closely watch price trends and OPEC+ announcements in the coming weeks to gauge the potential direction of the oil market.
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