Oil set for seventh straight weekly gain

Oil prices rose on Friday and were on track for their longest weekly gaining streak since early 2022, after forecasts for tightening supplies from the International Energy Agency (IEA).

Brent crude futures were up 63 cents, or 0.7%, at $87.03 a barrel by 1558 GMT, while US West Texas Intermediate (WTI) crude was up 68 cents, or 0.8%, at $83.50. On a weekly basis, both benchmarks are up about 1%.

The IEA on Friday warned that global inventories could fall sharply over the rest of 2023, potentially driving prices even higher, though the agency expects demand growth to slow to 1 million barrels per day (bpd) in 2024, down 150,000 bpd from its previous forecast.

Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) on Thursday said it expects global oil demand to rise by 2.25 million bpd in 2024, compared with growth of 2.44 million bpd this year. Both forecasts were unchanged from last month.

Thursday’s US consumer prices data for July also lifted market sentiment, as they fuelled speculation that the Federal Reserve is nearing the end of its aggressive rate hike cycle.

On the supply side, prices have been supported by extensions to output cuts by Saudi Arabia and Russia alongside supply fears driven by the potential for conflict between Russia and Ukraine to disrupt Russian oil shipments in the Black Sea region.

Supply cuts and improving economic outlook have created more optimism among oil investors in recent weeks, OANDA analyst Craig Erlam said.

Published in The Express Tribune, August 12^th, 2023.

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