Oil futures set to rise for a second week

by Jonathan Adams
Oil prices

Brent futures for August settlement were 13 cents lower at $85.58 a barrel while U.S. WTI crude futures for August delivery were 10 cents lower at $81.19

Crude oil futures were little changed on Friday but on course to rise for a second successive week amid signs of improving demand and declining oil and fuel inventories in the U.S., the world’s biggest oil consumer.

Brent futures for August settlement were 13 cents lower at $85.58 a barrel by 0927 GMT, while U.S. West Texas Intermediate (WTI) crude futures for August delivery were 10 cents lower at $81.19.

Prices have risen nearly 5% this month to their highest in over seven weeks.

The seasonal demand rise, as shown by the latest EIA data, renewed confrontation between Israel and Hezbollah, and the hurricane season could sustain price strength into the summer, Citi analysts said in a note.

U.S. government data released on Thursday showed total product supplied, a proxy for the country’s oil demand, increased by 1.9 million bpd in the week ending June 14 to 21.1 million barrels per day.

The data from the EIA showed a drawdown in U.S. crude stockpiles by 2.5 million barrels increased during the week to 457.1 million barrels, compared with analysts’ expectations for a drop of 2.2 million.

Gasoline inventories dropped by 2.3 million barrels to 231.2 million barrels, the Energy Information Administration said, compared with forecasts for a 600,000-barrel build.​

Demand prospects elsewhere also helped push prices higher.

Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance, according to analysts at ANZ Research.

Weighing on prices were U.S. data released on Thursday that showed a drop in new unemployment claims, which may lead the Fed to keep interest rates unchanged. Higher interest rates typically limit economic growth and, in turn, oil demand.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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