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Crude has posted four consecutive weekly gains on an expected
tightening of supply because of output cuts by the Organization
of the Petroleum Exporting Countries (OPEC) and its allies,
known collectively as OPEC+, as well as some involuntary
outages.
Brent crude advanced 65 cents, or 0.8%, to $83.57 a barrel by
1034 GMT while U.S. West Texas Intermediate (WTI) crude rose 92
cents, or 1.2%, to $79.70. Intra-day peaks for both contracts
were near their highest since April 19.
"We see the oil market undersupplied," UBS analysts said in a
report. "We retain a positive outlook and look for Brent to rise
to $85–90 over the coming months."
Still, oil dropped on Wednesday after data showed U.S. crude
inventories fell less than expected and the U.S. Federal Reserve
raised interest rates by a quarter of a percentage point,
leaving the door open to another increase.
"While the consensus broadly expects demand to exceed supply for
the remainder of this year, oil prices themselves have so far
refrained from providing a signal of such a fundamental trend,"
said Norbert Ruecker of Swiss bank Julius Baer.
Risk appetite in wider financial markets is being boosted by
growing hopes that central banks such as the Fed are nearing the
end of policy tightening campaigns, which would boost the
outlook for global growth and energy demand.
The European Central Bank, also viewed as approaching the end of
its tightening cycle, is expected to raise interest rates for
the ninth time in a row on Thursday.
A pledge on Monday from China to boost policy support for the
economy has spurred hopes of oil demand regeneration from the
world's largest crude importer, Phillip Nova analyst Priyanka
Sachdeva said in a note.
Coming into focus is an Aug. 4 meeting of key OPEC+ ministers to
review the market.
(Reporting by Alex LawlerAdditional reporting by Katya Golubkova
in Tokyo and Muyu Xu in SingaporeEditing by David Goodman)
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