July 5 2024: Oil prices were little changed on Friday, trading near their highest levels since late April and on track for a fourth consecutive week of gains, driven by hopes for strong summer fuel demand and some supply concerns.
Brent crude futures rose 11 cents, or 0.13%, to $87.54 a barrel by 0817 GMT. U.S. West Texas Intermediate (WTI) crude futures increased by 24 cents, or 0.29%, to $84.12.
With the U.S. market shut on Thursday for the Independence Day holiday, trading was thin and there was no settlement for WTI, but prices have risen this week on strong summer demand expectations in the United States.
“Those who have kept faith that the driving season would eventually come are glowing in prescience, and the many calls of a much better path for bulls in the third quarter seem to hold true at present,” said PVM oil analyst John Evans.
The U.S. Energy Information Administration (EIA) reported a significant 12.2 million barrel inventory draw last week, compared with analyst 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. Analysts said this could hasten interest rate cuts by the Federal Reserve and support oil markets.
On the supply side, Reuters reported on Thursday that Russian oil producers Rosneft and Lukoil will make sharp cuts to oil exports from the Black Sea port of Novorossiisk in July.
“This is a positive signal for the forecast supply deficit over the third quarter, but given Russia’s poor adherence to production quotas in the past, it will take some time to see if this will be delivered,” said Panmure Liberum analyst Ashley Kelty.
Meanwhile, Saudi Arabia’s Saudi Aramco cut prices for its flagship Arab Light crude sold to Asia in August to $1.80 a barrel above the Oman/Dubai average, underscoring the pressure faced by OPEC producers as non-OPEC supply grows.
Traders were also tracking the war in Gaza and elections in France and Britain, analysts said. Britain’s Labour Party was set for a landslide victory after 14 years of Conservative rule.
