News

By Arunima Kumar

(Reuters) -Oil prices extended gains on Friday, buoyed by the Russian Deputy Prime Minister's suggestion that OPEC+ could reverse its output increase after April, but were still on track for a more than 3% weekly decline on concerns over U.S. tariff policies.

Brent crude futures rose 99 cents, or 1.4%, to $70.45 a barrel by 1415 GMT. U.S. West Texas Intermediate futures were up 93 cents, also 1.4%, at $67.29.

Brent jumped to as much as $70.76 during the session and WTI hit $67.68 after Russia's Alexander Novak told reporters that the OPEC+ producer group will go ahead with its April increase but may then consider other steps.

"When examining the global oil balance OPEC+ must have deemed in its assessment that it was sufficiently constructive that the oil market could absorb extra barrels without undue negative influence on the price ... so far it seems the price action has proved them wrong," said Harry Tchilinguirian at Onyx Capital Group.

Brent was down 3.8% over the week, set for its biggest weekly decline since the week of November 11. WTI is set to finish 3.6% down for its biggest weekly drop since the week of January 21.

"The caution expressed by Mr Novak is simply another way of reiterating OPEC+'s conditionality clause relative to 'market conditions'. These conditions will dictate whether or not they keep to the plan of incrementally winding down their voluntary cuts," said Tchilinguirian.

Brent prices fell to their lowest since December 2021 on Wednesday after U.S. crude inventories rose and OPEC+ announced its decision to increase output quotas.

The market may have overreacted to OPEC+ members increasing output, but Novak clarified that additions will only happen if they can be absorbed to maintain market balance, said UBS analyst Giovanni Staunovo.

The group had said it intended to proceed with a planned April output increase, adding 138,000 barrels per day to the market.

In other supply news, comments from Treasury Secretary Scott Bessent indicated that the U.S. aim is to reduce Iranian crude exports to a trickle.

U.S. President Donald Trump's administration is considering a plan to inspect Iranian oil tankers at sea, Reuters reported on Thursday, citing sources familiar with the matter, continuing efforts to drive down Iranian oil exports to zero.

Global markets have been whipsawed by fluctuating trade policy in the U.S., the world's biggest oil consumer.

On Thursday Trump suspended the 25% tariffs he had imposed on most goods from Canada and Mexico until April 2, though steel and aluminium tariffs would still take effect on March 12.

While the delay in tariffs offers some relief, the market is still walking a tightrope between policy uncertainty and oversupply concerns, Rystad Energy's Mukesh Sahdev said in a note on Thursday.

In the U.S., job growth picked up in February and the unemployment rate edged up to 4.1%, but growing uncertainty over trade policy and deep federal government spending cuts could erode the labour market's resilience in the months ahead.