Crude oil futures settled lower on Friday as traders were skeptical about compliance with the OPEC production cut, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, February West Texas Intermediate crude fell by 64 cents, or 1.2%, to settle at $52.37 a barrel. For the week, prices saw a weekly decline of about 3%.
On London’s ICE Futures Exchange, March Brent crude, the global benchmark, shed 56 cents, or 1%, to end trading at $55.45 a barrel. For the week, prices were down nearly 2.9%.
Since the production curb was announced by OPEC, WTI prices have climbed by about 15% beginning January 1 of this year. If fully implemented, the production curb has the potential to eliminate nearly 1.8 million barrels of excess oil a day.
“Doubts on OPEC complying with cuts continue to weigh on market,” said Tariq Zahir, managing member of Tyche Capital Advisors.
On Wednesday, a U.S. government report revealed that domestic crude oil supplies increased by 4.1 million barrels for the week ending January 6 while total domestic output rose by 176,000 barrels a day to 8.946 million barrels a day.
The OPEC monthly report on January production will be released mid-February.
Saudi Arabia has also notified its Asia customers that the region will see a reduced crude oil supply beginning in February, according to reports.
“Saudi Arabia continues to show that the huge oil producer is actually walking the talk about cutting production and complying with the OPEC and non-OPEC deal,” said Michael Poulsen, oil risk manager at Global Risk Manager.
Meanwhile, February natural gas added 3.3 cents, or 1%, to settle at $3.419 per million British thermal units on the New York Mercantile Exchange. For the week, natural gas futures scored a weekly gain of around 4.1%.
Several oil-related reports will be issued during the week of January 16-20. The Energy Information Administration’s monthly report on drilling productivity, which includes figures on shale-oil output, will be released Tuesday. Monthly oil reports from OPEC and the IEA are due Wednesday and Thursday, respectively.
Weekly petroleum supply data from the EIA will be delayed to Thursday due to the Martin Luther King Jr. holiday.