NEW YORK (CNBC) - Oil prices were on track for their first weekly gain in five on Friday, underpinned by a weaker dollar and the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5.
Brent crude futures for November, which expire on Friday, were flat at $88.49 per barrel. The more active December contract was down 27 cents at $86.91.
U.S. West Texas Intermediate (WTI) crude futures fell 17 cents, or 0.2, to $81.06.
Both contracts rose by more than $1 earlier in the session but pared gains on news that OPEC+ narrowed the amount by which it was considering cutting output to between 500,000 and 1 million barrels per day (bpd), OPEC+ sources told Reuters.
An OPEC source put the likely figure closer to 500,000 bpd. Earlier this week, however, a source familiar with Russian thinking said Moscow could suggest a cut of up to 1 million bpd at the group’s Oct. 5 meeting.
“A deteriorating crude demand outlook won’t allow oil to rally until energy traders are confident that OPEC+ will slash output at the October 5th meeting,” senior OANDA analyst Edward Moya said in a client note.
Analysts expect a production cut because demand fears linked to a possible global economic slowdown and rising interest rates have weighed on crude prices.
Brent and WTI prices are likely to finish the third quarter with a chunky 23% decline.
“Expect oil prices to receive a supportive kick up the backside next week,” said Stephen Brennock of oil broker PVM, adding that the OPEC+ leadership will want to safeguard a price floor of $90 a barrel.
Brent and WTI are still poised for a weekly gain of about 3%. It would be the first weekly rise since August and follow nine-month lows hit earlier in the week.
Oil prices were shored up by a drop in the dollar from 20-year highs earlier in the week. A weaker greenback makes dollar-denominated oil cheaper for buyers holding other currencies, improving demand for the commodity.