Oil prices hit three-month lows, head for weekly loss as summer driving season kicks off

Crude oil futures fell to three-month lows on Friday and are heading to a weekly loss as the summer driving season gets underway with the Memorial Day holiday.

U.S. crude oil hit an intraday low of $76.15, the lowest level since Feb. 26. Global benchmark Brent fell to $80.65, the lowest level since Feb. 8. The two benchmarks are on pace for a weekly loss of about 4% and 3%, respectively.

“Macroeconomic developments have been failing to provide meaningful support for oil, which has its own problems to deal with,” said Tamas Varga, analyst at oil broker PVM, pointing to Russia overproducing in April despite commitments to slash production along with other OPEC+ members.

OPEC and its allies, led by Russia, will hold a virtual meeting on June 2 to review production policy. A coalition of OPEC+ members is voluntarily holding 2.2 million barrels per day off the market to support prices.

“Next week’s OPEC meeting is widely expected to roll over the current production ceiling, especially now that oil prices are in a relentless downtrend,” Varga said.

“But it would probably not be enough to unambiguously brighten the mood, simply because there is nearly 6 mbpd of supply cushion attached to the seemingly oversupplied market,” the analyst said.