Oil Prices Creep Up but On Pace for Fourth-Straight Week of Declines

Oil prices were rising Friday after hitting four-month lows but worries about demand continued to weigh on the market. Oil was on pace for its fourth-straight week of declines.

Brent crude, the international standard, was up 0.7% at $77.98 a barrel in early trading. West Texas Intermediate, the U.S. standard, was up 0.8% at $73.47 a barrel.

Oil futures settled at their lowest level since early July on Thursday, hit by a report showing a decline in U.S. industrial production in October. That saw prices approach a pattern known as contango, in which spot prices and near-term futures are worth less than futures expiring several months from now, indicating a well-supplied market.

“The demand outlook has weakened, thereby forcing a strong sell reaction from speculators who got caught with a big long and the smallest gross short position in 12 years,” said Ole Hanse, head of commodity strategy at Saxo Bank.

However, the drop could prove to be short lived according to the majority of forecasts, which call for a rebound in 2024 on stronger demand and potential supply cuts.

Analysts at Gerdes Energy Research upgraded
Chevron
(ticker: CVX) to a Buy rating from Neutral and maintained their price target of $171. They said with oil prices assumed at $70-$75 a barrel from 2024 through to 2028, the oil company should generate around $137 billion of free cash flow over that period, equivalent to 43% of its market capitalization.

Chevron
shares were up 0.2% at $142.04 in premarket trading. Chevron was a Barron’s stock pick earlier this month.

Write to Adam Clark at [email protected]

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