Oil headed for its second weekly gain after OPEC+ leaders’ commitment cuts.
Oil headed for a second weekly gain after OPEC+ leaders Saudi Arabia and Russia tightened supplies and US crude inventories fell.
U.S. crude rose nearly 2% weekly to over $72 a barrel. US crude rose weekly for the first time in a row since the end of May.
Saudi Arabia has brought massive price increases to its crude oil in Europe and the Mediterranean after announcing that it was extending its unilateral supply cut of 1 million barrels a day until August. In addition, Russia said that it will reduce exports by half a million barrels, even if it does not reduce production.
Official data in the US showed that nationwide crude inventories fell by 1.5 million barrels in the third week, falling to their lowest level since late January. Oil stocks in Cushing, Oklahoma, a major storage hub, also eased, while gasoline and distillate stocks fell.
Crude is 10 percent lower this year as tighter monetary policy, a sluggish recovery from China and durable Russian exports put pressure on futures. This week’s rally came despite widespread bearish action in other risk assets as strong US jobs data bolstered forecasts that the Fed will continue to raise interest rates.
Charu Chanana, market strategist at Saxo Capital Markets in Singapore, said Saudi Arabia’s hike in official selling prices was “a sign of strengthening demand”. “The broader risk aversion has been offset by signs of market contraction,” Chanana said.