Oil Prices Edge Up Amid OPEC+ Signals, But Third Weekly Decline Looms

Oil prices nudged higher on Friday, buoyed by indications from OPEC+ members Saudi Arabia and Russia that they might pause or reverse oil output increases. Despite this uptick, crude remains on track for its third consecutive weekly decline due to persistent demand concerns.

The downturn this week followed a Sunday decision by OPEC+ to begin phasing out some oil output cuts starting in October. Coupled with rising U.S. inventories, this move intensified worries about demand. A brief rally on Thursday, driven by the supportive comments from Saudi and Russian officials, offered some respite.

Anticipation now builds for the latest U.S. nonfarm payrolls data for May, expected at 12:30 GMT. This data could offer more clues regarding the timing of potential interest rate cuts by the Federal Reserve this year. Lower interest rates typically boost economic growth and, in turn, oil demand.

As of 10:30 GMT, Brent crude futures ticked up by $0.26, or 0.3%, reaching $80.13 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose by $0.12, or 0.2%, to stand at $75.67 a barrel.

On the macroeconomic front, Chinese data released on Friday revealed a second consecutive month of export growth in May. However, the figures also highlighted concerns about domestic demand, with overall imports, including crude oil, down once more. This is worrisome given that China is the largest crude oil importer globally.

Thursday also saw the European Central Bank implement its first interest rate cut since 2019, fueling analyst expectations that the Federal Reserve might soon follow suit. According to a Reuters survey of economists, U.S. nonfarm payrolls likely increased by 185,000 jobs in May, which would be a drop from the previous few months' average gain of 242,000 jobs.