By Arunima Kumar
(Reuters) -Oil prices extended gains on Friday, rising more than $1 a barrel, after Russia’s Deputy Prime Minister Alexander Novak said OPEC+ may reverse its oil output hike after April if needed.
Novak told reporters that the producer group will go ahead with the April increase, but after that it may consider other steps.
“I there is an imbalance in the market. We can always play in the other direction,” he said.
Brent crude futures rose $1.18, or 1.70%, to $70.64 a barrel by 1123 GMT. U.S. West Texas Intermediate futures rose $1.11, or 1.67%, to $67.47 a barrel.
“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 at Onyx Capital Group said.
For the week Brent is down 3.6%, set for its biggest weekly decline since the week of November 11. WTI is set to finish 3.4% down in its biggest weekly drop since the week of January 21.
“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,” Tchilinguirian said.
On Wednesday, Brent prices fell to their lowest since December 2021 after U.S. crude inventories rose and OPEC+ announced its decision to increase output quotas.
The group said on Monday it had decided to proceed with a planned April output increase, adding 138,000 barrels per day to the market.
Some analysts suggested that the increases could be paused after the initial barrels are brought in.
Any further decisions are likely to depend on oil prices, with tariffs playing a significant role in influencing these, Tamas Varga, analyst at oil broker PVM, said.
(Reporting by Arunima Kumar, Mohi Narayan and Colleen Howe; Editing by David Goodman and Andrew Heavens)
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