Oil settles lower but ends quarter up 28% on tight global supply

30 Sep Oil settles lower but ends quarter up 28% on tight global supply

Oil prices settled 1% lower on Friday due to macroeconomic concerns and profit taking, but rose about 30% in the quarter as OPEC+ production cuts squeezed global crude supply.

Front-month Brent November futures settled down 7 cents to $95.31 per barrel at the contract’s expiry, up about 2.2% in the week and 27% in the third quarter. The more liquid Brent December contract was settled down 90 cents to $92.20 per barrel.

U.S. West Texas Intermediate crude (WTI) settled down 92 cents to $90.97, up 1% in the week and 29% in the quarter.

With oil futures inching closer to $100 a barrel, many investors took profits on the rally given ongoing macroeconomic concerns.

Oil and gas activity in three U.S. energy producing states has been rising with the latest jump in prices, according to a survey by the Federal Reserve Bank of Dallas.

In July, U.S. crude production grew to its highest since November 2019, according to data from the Energy Information Administration.

Worries about the Chinese economy also intensified as shares of indebted property developer Evergrande Group (3333.HK) were suspended until further notice following a report that its chairman had been placed under police watch.

The U.S. oil and gas rig count, an early indicator of future output, fell by seven to 623 in the week to Sept. 29, the lowest since February 2022, energy services firm Baker Hughes (BKR.O) said in its closely followed report on Friday.

The OPEC+ ministerial panel meeting will take place on Oct. 4 and there is “increasing probability the voluntary supply cuts by Aramco are reduced,” National Australia Bank analysts said in a client note, referring to Saudi Arabia’s state oil producer.

The supply cuts announced by Saudi Arabia and Russia are expected to dominate oil prices for the remainder of this year.