By Ambar Warrick
Investing.com-- Oil prices recovered on Friday, and were set to end the week higher as the prospect of production cuts by the OPEC+ offset concerns over an Iran-led supply glut.
London-traded Brent oil futures rose 0.2% to $100.07 a barrel, while crude oil West Texas Intermediate futures rose 0.7% to $93.21 a barrel by 20:13 ET (00:13 GMT). Brent and WTI were set to gain 3.3% and 2.6% this week, respectively.
Prices plummeted on Thursday after U.S. officials said they would sign a nuclear deal with Iran that benefited the country. Washington responded to what is said to be the “final” draft of the bill this week, and is awaiting Iran’s response.
Reports that Iran was dropping major sticking points in the deal also furthered speculation over its imminent signing.
But while fears that the deal could release over 1 million barrels per day of oil into the market dented crude, prices were still headed for weekly gains after Saudi Arabia said it would cut supply to curb further losses in prices.
Saudi Arabia, through the Organization of Petroleum Exporting Countries and its allies (OPEC+), said production cuts would coincide with the release of Iranian supply, reinforcing support for crude prices.
Focus this week was also on the health of the American economy, ahead of an upcoming address by Federal Reserve Chair Jerome Powell to the Jackson Hole Symposium in Wyoming. The central bank head is expected to lay out plans for how the Fed plans to hike rates and combat inflation.
Surging inflation has severely weighed on U.S. fuel demand, with gasoline inventory data furthering the notion this week.
But sentiment towards the U.S. economy improved slightly this week after second-quarter GDP data was revised to show a smaller contraction than initially perceived, indicating that growth may be on the cards in the third quarter.
U.S. crude inventories also contracted more than expected over the past week, amid record-high exports.