HomeFinanceOil prices score a 4th straight weekly gain

Oil prices score a 4th straight weekly gain

Oil futures rose Friday, with U.S. and global crude benchmarks scoring a fourth straight weekly rise on expectations the second half of 2023 will see a tightening of supplies in the crude market.

Price action

  • West Texas Intermediate crude for September delivery



    rose $1.42, or 1.9%, to settle at $77.07 a barrel on the New York Mercantile Exchange. That left front-month prices up 2.3% for the week to settle at their highest since April 25, according to Dow Jones Market Data.

  • September Brent

    the global benchmark, added $1.43, or 1.8%, at $81.07 a barrel on ICE Futures Europe, for a 1.5% weekly rise.

  • Back on Nymex, August gasoline

    rose 2.1% to $2.80 a gallon, with prices up 6% for the week and ending at their highest since April. August heating oil

    added nearly 3.1% to $2.75 a gallon, up 5.7% for the week.

  • August natural gas

    fell by 1.6% to $2.71 per million British thermal units, for a weekly rise of about 6.9%.

Market drivers

Oil futures have bounced in July, with WTI up over 9% and Brent up more than 8%, trimming year-to-date losses, FactSet data show.

Weakness in crude prices in 2023 has been attributed to worries that interest-rate rises by global central banks will spark a sharp economic downturn, while a disappointing rebound by China after the lifting of strict COVID-19 curbs has also been a factor.

Any upside on oil is “capped by the gloomy outlook for the Chinese economy,” said Ricardo Evangelista, senior analyst at ActivTrades. “China is struggling to recover the growth levels we had been used to in the pre-pandemic years and, being the world’s largest crude importer, that is denting future oil demand prospects.”

The announcement on Wednesday that Beijing plans to deploy economic stimulus measures brought “some hope to oil traders,” he said in market commentary. “Such measures could reset expectations, upgrading demand forecasts and boosting oil prices.”

Expectations central banks are near the end of their interest rate hiking cycles and that the economy may prove more resilient than feared have accompanied crude’s rebound. Supply cuts by Saudi Arabia and Russia are also kicking in amid expectations the market was set to move into deficit in the second half.

Also see: Baker Hughes data show active U.S. oil-drilling rig count down a 6th straight week

“As markets are beginning to recognize supplies tightening, investors will keep an eye on the U.S. Federal Reserve meeting next week that is currently expected to raise rates another 25 basis points,” StoneX’s Kansas City energy team, led by Alex Hodes, wrote in Friday’s newsletter. All eyes will be on Fed Chairman Jerome Powell’s speech, “looking for any signs on whether this could be the final rate hike this year, or [if] he expects more to come.”

Read: Everyone thinks the Fed’s rate hike next week will be the final one — except the Fed

Also on Nymex Friday, natural-gas futures notched a weekly rise of 6.9%, but held onto a month-to-date loss of 3%, with prices down 39% so far this year.

Read: Why scorching summer temperatures haven’t yet led to a lasting rally for natural gas

Source link



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments