Commodities Update — Gold dips; Soybeans fall, corn rises; Copper rebounds; Food commodity prices declined globally in July

RIYADH: Oil prices settled higher on Friday, recouping some of this week’s losses on strong US job growth data, but closed the week at their lowest levels since February, rattled by worries a recession could hit fuel demand.

Brent crude settled up 80 cents to $94.92 a barrel, 11 percent off last Friday’s settlement. 

US West Texas Intermediate crude settled up 47 cents to $89.01, off 8 percent in the week.

US oil rig count falls by the most since September

US energy firms this week cut the number of oil rigs by the most since September as production grows incrementally because energy firms are boosting shareholder returns and facing higher operating costs due to inflationary and supply chain pressures.

The number of oil rigs, an early indicator of future output, fell seven to 598 in the week to Aug. 5, the first weekly decline in 10 weeks, energy services firm Baker Hughes Co. said in its closely followed report on Friday.

Gas rigs rose four to 161, their highest since August 2019, while the combined oil and gas fell by three to 764, which puts the total rig count up 273, or 56 percent, over this time last year, Baker Hughes said.

Even though the total rig count has climbed for a record 24 months through July, weekly increases have mostly been in the single digits and oil production is only forecast to recover to pre-pandemic record levels next year.

US, Indonesia to discuss oil price cap on Russia

A senior US Treasury Department official will visit Indonesia and Singapore next week to talk with counterparts about the potential price cap on Russian oil exports planned as a response to Moscow’s invasion of Ukraine, the department said on Friday.

Elizabeth Rosenberg, a Treasury Department assistant secretary for terrorist financing and financial crimes, will visit Jakarta on Monday and Tuesday, and will visit Singapore, a major oil hub, from Wednesday through Thursday.

She will meet government officials to discuss responses to Russia’s war in Ukraine including the price cap on Russian oil, a major funder of President Vladimir Putin’s war machine. Rosenberg will also meet with business leaders in energy and finance.

US Treasury Secretary Janet Yellen has promoted the cap that would limit the amount of oil refiners and traders can pay for Russian crude as a way to help lower global oil prices without reducing supply.

Indonesia’s state oil company PT Pertamina said in March it was considering buying crude from Russia as it sought crude for a revamped refinery. But in May it was reconsidering the plan, press reports said.

Critics have said a price cap could lead to higher, not lower prices, if Russia decides to slow oil exports. Such a move could cost Russian oil producers if they have to shut in wells as a result.

Russia’s offline primary oil refining capacity revised up by 23 percent for August

Russia’s idled primary oil refining capacity was revised up to 3.196 million tons in August, up 23 percent from the previous estimate, according to Reuters calculations based on Refinitiv Eikon data.

The idled primary oil refining capacity for September was also revised up by 11 percent to 4.295 million tons. The revisions follow several adjustments in maintenance plans on Russian oil refineries.

(With input from Reuters)