Oil futures ended higher Friday, booking a seventh straight weekly rise as investors focused on tightening supplies as a result of previously announced cuts by Saudi Arabia and Russia.
Price action
-
West Texas Intermediate crude for September delivery
CL00,
-0.18% CL.1,
-0.18% CLU23,
-0.18%
rose 37 cents, or 0.5%, to finish at $83.19 a barrel on the New York Mercantile Exchange. The U.S. benchmark rose 0.5% for the week. -
October Brent crude
BRN00,
-0.09% BRNV23,
-0.09% ,
the global benchmark, rose 41 cents, or 0.5%, to settle at $86.81 a barrel on ICE Futures Europe, leaving a 0.7% weekly gain. -
Back on Nymex, September gasoline
RBU23,
-0.64%
gained 2.1% to $2.965 a gallon, up 6.5% for the week. September heating oil
HOU23,
-0.23%
fell 1% to $3.122 a gallon, leaving it with a weekly gain of 1.9%. -
September natural gas
NGU23,
+0.58%
gained 0.3% to $2.77 per million British thermal units, posting a 7.5% weekly rise.
Market drivers
WTI and Brent each scored a seventh straight weekly gain. In its monthly report, released Friday, the International Energy Agency said crude oil supplies would tighten further into the fall as Saudi Arabia and Russia continue supply cuts.
“Deepening OPEC+ supply cuts have collided with improved macroeconomic sentiment and all-time high world oil demand,” the report said.
If the bloc’s current targets are maintained, “oil inventories could draw by 2.2 mb/d (million barrels a day) in 3Q23 and 1.2 mb/d in the fourth quarter, with a risk of driving prices still higher,” the agency said.
The IEA said it expects oil supplies to rise by 1.5 million barrels a day next year, 300,000 barrels a day more than it was expecting last month. That’s expected to be driven by production increases in the U.S., Brazil and Guyana.
See: IEA raises oil supplyfForecasts as U.S. producers counter OPEC+ cuts
WTI closed Wednesday at its highest since November, while Brent finished at its highest since early January.
“On the charts, oil did break out to the upside from the 2023 trading range this week but WTI futures had become overbought on the daily time frame and some consolidation or a pullback towards the $80 level should not come as a surprise,” wrote analysts at Sevens Report Research, in a Friday note.
They want to see recent highs surpassed to confirm a new uptrend is in place and that the midweek rally “was not just a ‘head fake’ as recession worries remain a major headwind on the energy complex,” they wrote.
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