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 weekâ€s OPEC meeting is widely expected to roll over the current production ceiling, especially now that oil prices are in a relentless downtrend,â€� 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.