Oil storage tanks and pipelines at the Hardisty Terminal in Hardisty, Alberta, Canada, Thursday, April 27, 2023.
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Oil prices were expected to rise for a fourth straight session on Friday, ending a two-week losing streak, on tighter supplies and hopes OPEC+ would extend production cuts through the end of the year.
US West Texas Intermediate (WTI) crude oil rose 81 cents (1%) to $84.45 a barrel and Brent crude rose 82 cents (0.9%) to $87.65 a barrel. WTI is up more than 5% over the week and Brent is up about 3%.
Analysts expect Saudi Arabia to extend its voluntary production cut of 1 million barrels a day through October, adding to cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.
National Australia Bank said: “Prices above $90 a barrel (on an ongoing basis) are needed to bring OPEC supply back to the market and to incentivize US shale producers to increase drilling activity, with production cuts extended. I continue to expect it to,” he said. In a customer memo on Friday, he said:
Russia, the world’s second-largest oil exporter, has also agreed with OPEC-plus partners to cut oil exports, Deputy Prime Minister Alexander Novak said Thursday.
U.S. crude inventories fell by 10.6 million barrels last week, according to government data on Wednesday. Commercial crude inventories have fallen by 34 million barrels since mid-July.
Traders and investors often treat changes in U.S. inventories as a proxy for changes in the global production-consumption balance, and continued depletion of inventories could push spot prices and spikes higher.
“Signs of stronger demand are also evident in product markets, with underlying gasoline demand rising for the first time in three weeks,” ANZ said in a research note on Friday.
A weaker dollar, which threatens to end a six-week winning streak, also helped the market. A stronger dollar weighs on oil demand as it makes commodities more expensive for buyers holding other currencies.
A survey showing factory activity in China is back on the rise and Beijing’s move to support a struggling Chinese housing market also contributed to higher oil prices on Friday, with traders in the world’s second-largest oil consumer. expected to stimulate demand for
