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West Texas Intermediate (WTI) crude futures gained 86 cents, or
1.1%, to settle at $81.25 a barrel, and Brent crude futures rose
68 cents, or 0.8%, to settle at $84.80 a barrel.
Both benchmarks pushed higher on Friday after industry data
showed that the U.S. oil and natural gas rig count, an early
indicator of future output, fell for the sixth week in a row. A
slump in U.S. production could exacerbate an anticipated supply
tightness through the rest of this year.
Those concerns, spurred on by output cuts from the Organization
of the Petroleum Exporting Countries and allies, helped oil
prices gain for seven straight weeks since June. Brent crude
gained about 18% and WTI gained 20% over the seven weeks ended
Aug. 11.
This week, however, oil prices dropped about 2% from last week,
as a worsening property crisis in China added to concerns about
the country's sluggish economic recovery and reduced investors
appetite for risk across markets.
"Concerns for investors remain focused on the tension between
slowing global growth and still-tight global supplies," said Rob
Haworth, senior portfolio manager at U.S. Bank Asset Management.
"Prices are likely to remain range-bound for now," Haworth said,
adding that demand is in question for investors worried by the
weak data from China.
Concern is also mounting that the U.S. Federal Reserve has not
finished raising interest rates to tackle inflation. Higher
borrowing costs can impede economic growth and in turn reduce
overall demand for oil.
Oil benchmarks were further depressed by seasonal demand
weakness heading into the autumn, said Jay Hatfield, CEO of
Infrastructure Capital Management.
Hatfield said he expects demand to hold up in China despite its
slowing economy and forecast oil prices would trade between $75
to $90 a barrel over the coming months.
(Reporting by Shariq Khan; Additional reporting by Natalie
Grover, Paul Carsten and Sudarshan Varadhan; Editing by Shri
Navaratnam, Jamie Freed, Conor Humphries, Jane Merriman and
Barbara Lewis, David Gregorio)
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