Oil on track for a fourth week of gains

by Jonathan Adams
investing in oil gas

Brent crude futures, which have gained 7% over the past four weeks, slid 31 cents, or 0.4%, to $87.12 a barrel

Oil prices slipped on Friday but were on track for a fourth successive week of gains and were near their highest levels since late April on hopes of strong summer fuel demand and some supply concerns.

Brent crude futures, which have gained 7% over the past four weeks, slid 31 cents, or 0.4%, to $87.12 a barrel by 0656 GMT. U.S. WTI crude futures, which have jumped 9% over the last four weeks, were at $83.70, down 18 cents, or 0.2%, from Wednesday’s close.

With the U.S. market closed for the Fourth of July holiday on Thursday, trading was thin and there was no settlement for WTI.

Oil gained this week on strong summer demand expectations in the US, the world’s biggest oil consumer.

Market sentiment has been supported this week by strong mobility indicators and intensifying geopolitical tension in the Middle East, analysts at ANZ Research said in a note on Friday.

The U.S. EIA reported a massive 12.2 million barrel draw in inventories last week, compared with analysts’ expectations for a draw of 700,000 barrels.

U.S. data on Wednesday showed that first-time applications for unemployment benefits increased last week while jobless numbers also rose, which analysts said could potentially hasten interest rate reductions by the Fed and support oil markets.

On the supply side, Reuters reported on Thursday that Russia’s oil producers Rosneft and Lukoil will sharply cut oil exports from the Black Sea port of Novorossiisk in July.

Meanwhile, Saudi Arabia’s Saudi Aramco cut the price for the flagship Arab Light crude it will sell to Asia in August to $1.80 a barrel above the Oman/Dubai average, underscoring pressure faced by OPEC producers as non-OPEC supply increases.

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