BNR – The price of oil increased on Friday, putting it on course for its second weekly rise in a row. This occurred as sustained demand led to a larger-than-expected drop in US oil stocks, raising concerns about growing US interest rates.
At 0819 GMT, Brent oil futures rose 31 cents, or 0.4%, to $76.83 per barrel. However, West Texas Intermediate crude in the United States rose 31 cents, or 0.4%, to $72.11 per barrel.
Both were expected to rise by approximately 2% this week.
Brent crude keeps trading roughly $10 per barrel lower than its April highs. Since early May, it has been trading between $71 and $79 a barrel. In the face of interest rate rises and bad Chinese economic statistics, it remained robust.
“The crude demand outlook is starting to look better as we enter peak summer travel in the US,” said analyst Edward Moya from OANDA. “The Saudis were able to raise prices to Europe and Asia.”
US Crude Oil Reserves Decline Beyond Projections
Due to solid refining demand, US crude reserves declined beyond what was projected. Gasoline inventory, on the other hand, had a significant drop following an increase in transportation last week.
Rising predictions that the US Federal Reserve will hike interest rates restricted oil price advances. Indeed, an increase in interest rates may weigh on GDP and consequently on oil consumption.
According to statistics, the number of Americans submitting new jobless claims climbed slightly last week. In addition, private payrolls increased in June.
Major oil producers Saudi Arabia and Russia both declared further output curbs for August this week. The overall amount reduced by OPEC and its partners is currently about five million barrels per day. This is equivalent to around 5% of world oil production.
According to sources close to OPEC, the organisation will likely retain an optimistic outlook for a rise in oil demand next year.
Next week’s US and Chinese inflation statistics will be scrutinised by investors for clues on rate paths.