Crude oil futures fell for a third straight week, which began with a sell-off triggered by OPEC+’s decision to withdraw voluntary production cuts of 2.2 million barrels a day at the end of this year and gradually bring some barrels back to the market later this year.

In an attempt to stem the sell-off, Saudi Arabia’s energy minister said OPEC+’s plan to gradually return some barrels to the market could be paused or reversed.

However, the Saudis have cut the price of their flagship Arab Light crude for Asian customers after three consecutive monthly increases, in an obvious sign of demand uncertainty.

Oil rebounded on Thursday on up-to-date hopes for U.S. interest rate cuts after the European Central Bank cut rates for the first time since 2019, but the rebound lost momentum on Friday after much larger-than-expected U.S. employment growth in May .

The robust jobs report could lower expectations when the Federal Reserve starts cutting interest rates.

Assuming all other factors remain constant, “lower rates are nominally supportive of higher stock and commodity prices, suggesting that further delays in the rate cut schedule could have an impact on future oil prices,” wrote Schneider Electric’s Robbie Fraser, according to Market watch.

Also this week, the United States reported bearish oil data as domestic commercial crude oil inventories increased by 1.2 million barrels in the week ended May 31, compared with expectations for a decline of 1.6 million, while gasoline and distillate stocks rose, which increased concerns about demand prospects.

On Friday, Baker Hughes said the number of dynamic U.S. drilling rigs, an early indicator of future production, had fallen to its lowest level since January 2022.

Also on Friday, the U.S. Department of Energy announced plans buy another 6 million barrels crude oil to replenish strategic oil reserves.

Nymex (CL1:COM) pre-month crude ended the week with July deliveries -1.9% to USD 75.53/bbl, and the August price of Brent crude oil (CO1:COM) closed -1.8% per week to USD 79.62/bbl; on Friday, WTI crude ended the session unchanged, and Brent fell by 0.3%.

Meanwhile, July natural gas Nymex (NG1:COM) rose this week, +12.8% to $2,918/MMBtu as balmy weather boosted demand in the energy sector as well as the prospect of reducing excess inventories.

ETFs: (NYSEARCA: USE), (NNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (COOKING), (COLD), (UNL), (FCG)

Hedge funds abandoned their bullish assumptions for Brent crude oil and increased their miniature positions this week, sending positions to the least bullish in almost a decade, following the OPEC+ decision, Bloomberg reported.

Money managers’ net long position in Brent crude declined by 102,075 lots to a total of 45,678 lots by Tuesday, the lowest level of net long positions since September 2014, according to weekly data from ICE Futures Europe.

OPEC+ ministers tried to reassure markets that their plan could be subject to adjustments based on market conditions, which helped oil pare weekly losses and possibly reverse the stance of money managers in next week’s data.

The energy sector, as indicated by the Energy Select Sector SPDR ETF (NYSEARCA:XLE), was one of the two worst results of the week, -3.2%.

Top 5 Energy and Natural Resources Gains Over the Last 5 Days: Flotek Industries (FTK) +16.6%Westport Fuel Systems (WPRT) +15.7%Knot Offshore Partners (KNOP) +12.7%Osisko Development (ODV) +8.9%Next Decade (NEXT) +8.8%.

Top 10 declines in energy and natural resources over the last 5 days: ASP isotopes (ASPI) -21.5%Fortuna Silver Mines (FSM) -20.3%Ivanhoe Electric (IE) -19.9%enCore Energy (EU) -15.2%Energy fuels (UUUU) -15.1%Uranium Energy (UEC) -14.3%Vistra Energy (VST) -14.1%Taseko Mines (TGB) -14.1%YPF (YPF) -13.7%Transportadora de Gas del Sur (TGS) -13.7%.

Source: Barchart.com