Oil Prices Hold Steady in Asian Trade, Eye Fourth Straight Week of Gains
In the bustling Asian trade market, oil prices remained relatively unchanged on Friday, poised to secure a fourth consecutive week of gains. The prices lingered near their peak levels since late April, fueled by optimism surrounding robust summer fuel demand and lingering supply concerns, as reported by Reuters.
Brent crude futures, on a steady incline of 7 percent over the past four weeks, saw a minor dip of 2 cents, settling at $87.41 per barrel by 3:43 a.m. in Saudi time.
US West Texas Intermediate crude futures, experiencing a 9 percent uptick over the same timeframe, saw a slight increase to $83.97, rising by 9 cents from the previous day’s close. With the US market observing the Fourth of July holiday on Thursday, trading activity was subdued, resulting in no settlement for WTI.
The surge in oil prices this week can be attributed to the optimistic outlook on summer demand in the US, the largest oil consumer globally.
According to analysts at ANZ Research, “Market sentiment has been supported this week by strong mobility indicators and intensifying geopolitical tension in the Middle East.”
The US Energy Information Administration unveiled a significant drawdown of 12.2 million barrels in inventories last week, surpassing analysts’ projections of a 700,000-barrel decrease.
In a separate development, US data released on Wednesday revealed a rise in first-time applications for unemployment benefits, along with an increase in jobless figures. Analysts speculated that this could potentially expedite interest rate cuts by the US Federal Reserve, thereby bolstering oil markets.
On the supply front, Reuters disclosed on Thursday that Russian oil giants Rosneft and Lukoil are set to slash oil exports from the Black Sea port of Novorossiisk in July.
Meanwhile, Saudi Aramco, the state-owned oil company of Saudi Arabia, reduced the price for its flagship Arab Light crude slated for sale in Asia in August to $1.80 a barrel above the Oman/Dubai average. This move underscores the mounting pressure faced by OPEC producers amidst the escalating non-OPEC supply.
Analysts also pointed out that traders are closely monitoring the ongoing conflict in Gaza, as well as the forthcoming elections in France and the United Kingdom, which could impact oil market dynamics.