Aug 4 (Reuters) – Oil prices rose more than a dollar a barrel on Friday to record a sixth consecutive week of gains, after top producers Saudi Arabia and Russia extended supply cuts through September, adding to undersupply concerns.
Brent crude futures rose $1.10, or 1.3%, to settle at $86.24 a barrel, while the U.S. West Texas Intermediate crude gained $1.27, or 1.6%, to close at $82.82 a barrel. Both benchmarks hit their highest levels since mid-April on Friday.
Saudi Arabia on Thursday extended a voluntary oil production cut of 1 million barrels per day to the end of September, keeping the door open for another extension. Russia has also elected to reduce its oil exports by 300,000 barrels per day next month.
"With the production cut extended, we anticipate a market deficit of more than 1.5 million barrels per day (bpd) in September, following an estimated deficit of around 2 million bpd in July and August," UBS analysts wrote in a note.
On the demand front, global oil consumption could grow by 2.4 million bpd this year, Russian Deputy Prime Minister Alexander Novak said on Friday after a ministerial panel meeting of the OPEC+ group – the Organization of the Petroleum Exporting Countries and allies.
A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo Acquire Licensing Rights
The meeting yielded no changes to output policy. The panel noted that it could take additional measures at any time, which could mean additional cuts if market conditions worsen, the UBS note added.
UBS said it expects Brent prices to trade in the $85 to $90 per barrel range over the coming months.
Earlier on Wednesday, the U.S. Energy Information Administration reported that the country's crude oil inventory declined by a record 17 million barrels last week as exports and refiners' input of crude oil ramped up in the heart of summer travel season.
Weighing on oil prices, data released on Friday showed the U.S. economy maintained a moderate pace of job growth in July, but solid wage gains and a decline in the unemployment rate pointed to continued tightness in labor market conditions.
Additionally, the downturn in euro zone business activity worsened more than initially thought in July and the Bank of England raised its interest rate to a 15-year peak on Thursday.
Reporting by Shariq Khan in Bengaluru; Additional reporting by Natalie Grover in London, Arathy Somasekhar in Houston and Sudarshan Varadhan in Singapore; Editing by Jason Neely, Kirsten Donovan, David Gregorio, Leslie Adler and Deepa Babington
Our Standards: The Thomson Reuters Trust Principles.
Thomson Reuters
Shariq reports on energy markets with a focus on US physical refined products and global financial oil markets. He is a regular contributor to energy M&A and corporate moves at top shale companies including oil majors and top oil focused private equity firms. He was nominated for 2020 Reuters journalist of the year for exclusive coverage of mass layoffs and bankruptcies in the shale patch during the peak of the COVID-19 pandemic. Shariq graduated in journalism and holds six years of experience covering energy equities and markets. Contact: 918884014512
U.S. defense contractor General Dynamics beat Wall Street estimates on Wednesday, as demand for artillery and armored vehicles helped overcome higher operating expenses.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2023 Reuters. All rights reserved
Oil rises for 6th straight week as global supplies tighten – Reuters
Leave a comment