Oil posts fifth week of gains on signals of tighter supply
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[July 29, 2023] By
Stephanie Kelly
NEW YORK (Reuters) -Oil prices rose on Friday and notched a fifth
straight week of gains as investors were optimistic that healthy demand
and supply cuts will keep prices buoyant.
Risk appetite in wider financial markets has been fueled by growing
expectations that central banks such as the U.S. Federal Reserve and
European Central Bank are nearing the end of policy tightening
campaigns, boosting the outlook for global growth and energy demand.
Bolstered by supply cuts from the OPEC+ alliance announced earlier this
month, both oil benchmarks gained nearly 5% for the week - a fifth
straight week of gains. The benchmarks are on track to gain over 13% for
the month.
Brent crude settled 75 cents higher to $84.99 a barrel, while U.S. West
Texas Intermediate (WTI) crude gained 49 cents to $80.58 a barrel.
Both benchmarks fell by as much as $1 briefly earlier in the session, as
investors took profits after WTI rose above $80 per barrel, Price
Futures Group analyst Phil Flynn said.
Bullish demand expectations were boosted on Thursday after U.S. second
quarter gross domestic product grew at a forecast-beating 2.4%,
supporting Federal Reserve Chairman Jerome Powell's view that the
economy can achieve a so-called "soft landing."
![](http://archives.lincolndailynews.com/2023/Jul/29/images/ads/current/graue_sda_042021.png)
Investors are warming up to the idea of peak rates getting ever closer,
while it is looking increasingly probable that the United States will
avoid recession, said PVM analyst Tamas Varga.
Fresh data released on Friday showed some of the euro zone's top
economies displayed unexpected resilience in the second quarter even as
a raft of indicators pointed to renewed weakness ahead, as manufacturing
ails and services slow.
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A view of the Phillips 66 Company's Los
Angeles Refinery (foreground), which processes domestic & imported
crude oil into gasoline, aviation and diesel fuels, and storage
tanks for refined petroleum products at the Kinder Morgan Carson
Terminal (background), at sunset in Carson, California, U.S., March
11, 2022. REUTERS/Bing Guan
![](http://archives.lincolndailynews.com/2023/Jul/29/images/ads/current/debbiesfloral_lda_060123.png)
Meanwhile, policymakers in China have pledged to step up stimulus
measures to invigorate the post-COVID recovery after the world's
second-largest economy grew at a frail pace in the second quarter.
In an interview on Friday, Exxon Mobil chief Darren Woods said he
expected record oil demand this year and next.
On the supply side, U.S. oil rigs fell by one to 529 this week,
their lowest since March 2022, energy services firm Baker Hughes
said on Friday. The data is an indication of future supply.
Evidence of tightening is mounting, given declining U.S. inventories
and Saudi Arabia's voluntary cut of 1 million barrels per day,
Commerzbank analysts said, highlighting this month could have seen
OPEC oil production plunge to its lowest level since the autumn of
2021.
Saudi Arabia is expected to extend the voluntary oil output cut for
another month to include September, five analysts said, to provide
additional support for the oil market.
(Reporting by Stephanie Kelly in New York; additional reporting by
Natalie Grover in London, Laura Sanicola in Washington and Andrew
Hayley in Beijing; Editing by Deepa Babington, Kirsten Donovan)
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