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Oil prices rose, on Friday, after the International Energy Agency expected record global demand and shrinking supplies, which pushed oil to gain for the seventh week in a row, in the longest winning streak since 2022.
Brent crude futures rose 41 cents, or 0.5%, to settle at $86.81 a barrel, while US West Texas Intermediate crude futures rose 37 cents, or 0.5%, to settle at $83.19 a barrel.
The International Energy Agency said global oil demand reached a record 103 million barrels per day in June and could reach another peak this month.
At the same time, the decision by Saudi Arabia and Russia to extend production cuts caused a sharp decline in stocks for the remainder of 2023, which the International Energy Agency said could lead to higher oil prices further.
The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday that it expects global oil demand to rise by 2.44 million barrels per day this year, adding that the oil market prospects look good in the second half of the year.
Investor sentiment was boosted by US economic data released this week, fueling speculation that the Federal Reserve (the US central bank) is close to ending its interest rate hike cycle.
Craig Erlam, an analyst at OANDA, said the supply cuts and improved economic outlook have given oil investors optimism. However, he pointed to signs of diminishing momentum after a sustained rally in prices. On Thursday, Brent crude hit its highest level since January, a day after West Texas Intermediate (WTI) recorded its highest level this year.
The last time the price of Brent crude rose for seven consecutive weeks was in January-February 2022, before Russia’s invasion of Ukraine. Unstable economic data coming out of China affected sentiment.
While customs data showed crude oil imports rising year-on-year, China’s total exports fell 14.5% in July, with monthly crude imports falling from near-record highs in June to their lowest since January.
(Reuters)
