Oil futures retreated back under the crucial benchmark of $50 on Friday despite posting their third weekly consecutive gain, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, November West Texas Intermediate crude fell by 63 cents, or 1.3%, to settle at $49.81 a barrel. For the week, prices reflected an increase of nearly 3.3% after posting gains in each of the past two weeks. On Thursday, WTI reached a four-month high of $50.44 a barrel.
On London’s ICE Futures Exchange, December Brent crude, the global benchmark, fell 58 cents, or 1.1%, to end trading at $51.93 a barrel. For the week, the contract gained nearly 3.5%.
Two additional factors are critical for the immediate turnaround of crude oil supplies and settlements.
OPEC cartel representatives will meet informally with a Russian delegation at the World Energy Congress meeting in Istanbul, Turkey before October 13 in order to discuss the cartel’s plan to cut production. OPEC previously indicated the production agreement details will be finalized at the group’s next official meeting in Vienna on November 30.
Traders continue to watch developments related to Hurricane Matthew and its potential to disrupt supplies and demand for both oil and gasoline.
“Hurricane Matthew is playing an important role in this [oil] price move as [a] number of tankers are at risk—not to mention the possibility of disruption for oil supply,” said Naeem Aslam, chief market analyst at ThinkMarkets.
Meanwhile, November natural gas added 14.4 cents, or 4.7%, to end trading at $3.193 per million British thermal units on the New York Mercantile Exchange. For the week, natural gas futures reflected a gain of about 9.9%.
On Thursday, industry data revealed a larger than expected weekly rise in domestic supplies of natural gas.
“Colder weather is coming after about October 20, and this should rapidly turn on the heat—and when you turn on the heat, you get much less working gas going into inventory,” said Richard Hastings, macro strategist at Seaport Global Securities.