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Futures Movers: Oil ends lower for the session, up for the week, ahead of OPEC+ meeting, EU ban on Russian oil

Oil futures edged higher on Friday, with U.S. prices holding above $80 a barrel, as investors awaited a pair of events: a Sunday meeting of the Organization of the Petroleum Exporting Countries and its allies, and the Monday kickoff of European Union ban on Russian seaborne crude imports.

Price action

West Texas Intermediate crude for January delivery
CL00,
-1.24%

CL.1,
-1.24%

CLF23,
-1.24%

climbed by 29 cents, or 0.3% at $81.51 a barrel on the New York Mercantile Exchange, with prices for the most-active contract eying a gain of 6.9% for the week.

February Brent crude
BRN00,
+0.32%

BRNG23,
+0.32%
,
the global benchmark, was up 13 cents, or 0.2%, at $87.01 a barrel on ICE Futures Europe, headed for a nearly 4% weekly gain.

Back on Nymex, January gasoline
RBF23,
-2.07%

fell 0.6% to $2.3272 a gallon, while January heating oil
HOF23,
-2.64%

was down 1.3% at $3.2214 a gallon.

January natural gas
NGF23,
-7.47%

was down 2.6% at $6.563 per million British thermal units, poised to lose more than 10% for the week.

Market drivers

Oil is on track for a weekly gain, buoyed in part by signs China is beginning to ease strict COVID curbs.

Meanwhile, OPEC+ meets Sunday. Many analysts look for the group to hold production steady amid uncertainty over how a EU ban on vessel-borne Russian crude that begins Monday will affect the market.

“In view of the many uncertainties on the market, however, it is unlikely to implement any further measures this Sunday. After all, the EU’s oil embargo on (seaborne) crude oil from Russia will come into force on Monday,” said Barbara Lambrecht, commodity analyst at Commerzbank, in a note.

Oil prices have seen volatile trading in the run up to the meeting, with U.S. prices spending much of the week rebounding from a brief drop on Monday to the lowest intraday level of the year.

Read: Oil-price volatility complicates Sunday’s OPEC+ decision on production levels

“It’s too soon for OPEC to implement another production cut as the current cut is still getting understood, especially in light of the latest China COVID policy pivot,” Stephen Innes, manager partner with SPI Asset Management, told MarketWatch.

It’s also unclear what effect a separate price cap on Russian oil will have. European Union officials have proposed a cap of $60 a barrel.

See: EU edges closer to imposing $60-a-barrel cap on Russian oil prices

“I don’t think the Russian cap will have teeth as there are too many back channels and shadow fleets to compensate,” said Innes. “But it will be perceived initially as bullish when market actualized. Focus will immediately turn to Russian exports data for proof.”

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