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The
seven-week upswing in prices, galvanized by supply cuts by the
Organization of the Petroleum Exporting Countries and allies
(OPEC+), was the longest streak for both benchmarks this year.
Brent futures rose by about 18% and West Texas Intermediate
crude (WTI) by more than 20% in the seven weeks ended Aug. 11,
with prices hitting their highest levels in months.
The benchmarks pared some gains this week, slipping more than
3%.
Prices were little changed on Friday. Brent crude slipped 21
cents to $83.91 a barrel as of 1033 GMT, while WTI edged 9 cents
lower to $80.3 a barrel.
China, the world's biggest oil importer, is seen as key to
shoring up oil demand over the rest of the year.
But the country's post-pandemic recovery has been sluggish,
weakened by tepid domestic consumption, faltering factory
activity and ailing property sector, raising concerns that
Beijing will not meet its annual growth target of 5% without
substantial stimulus measures.
"Oil finds itself ... marooned in the shipping lanes of
financial news and not even continued inventory draw is enough
to allow the continued navigation in positive waters," said John
Evans of oil broker PVM.
Data showed that U.S. crude oil inventories fell by nearly 6
million barrels last week on strong exports and refining run
rates. Weekly products supplied, a proxy for demand, rose to the
highest since December. [EIA/S].
China also made a rare draw on crude oil inventories in July,
the first time in 33 months it has dipped into storage.
Another factor weighing on prices are concerns that the U.S.
Federal Reserve is not quite finished with hiking interest rates
to tackle inflation. Higher borrowing costs can impede economic
growth and in turn reduce overall demand for oil.
(Reporting by Natalie Grover in London, Sudarshan Varadhan in
Singapore; Editing by Shri Navaratnam, Jamie Freed and Conor
Humphries)
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