Breaking News
Investing Pro 0
Extended Sale! Save on premium data with Claim 60% OFF

Oil rallies for fourth straight week on tightening supply

Published Jul 20, 2023 08:53PM ET Updated Jul 21, 2023 04:50PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. REUTERS/Stringer
 
SPGI
-0.26%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
LCO
-0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Shariq Khan

BENGALURU (Reuters) -Oil prices rose nearly 2% on Friday to record a fourth consecutive weekly gain, buoyed by growing evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine that could further hit supplies.

Brent crude futures rose $1.43, or 1.8%, to settle at $81.07 a barrel, with a weekly gain of about 1.2%. U.S. West Texas Intermediate crude ended $1.42, or 1.9%, higher at $77.07 a barrel, its highest since April 25. WTI gained nearly 2% in the week.

"The oil market is starting to slowly price in a looming supply crunch," Price Futures Group analyst Phil Flynn said.

"Global supplies are starting to tighten and that could accelerate dramatically in the coming weeks. Increased war risk could also impact prices," Flynn said.

Russia hit Ukrainian food export facilities for a fourth day in a row on Friday and practised seizing ships in the Black Sea, in an escalation of tensions in the region since Moscow's withdrawal this week from a U.N.-brokered safe sea corridor agreement.

A shutdown of the grain corridor could hit supplies of ethanol and biofuels that are blended with oil products at a time that global grain markets are already tightening, which would lead to refiners using more crude oil, Flynn said.

The seizure of ships could also add risks to oil and other goods exports in the region, he added. The Kremlin on Friday said Ukraine's "unpredictable" actions pose a danger to civilian shipping in the Black Sea, and the situation around Russian exports requires analysis.

In the U.S., crude inventories fell last week, amid a jump in crude exports and higher refinery utilisation, the Energy Information Administration (EIA) said on Wednesday. Earlier on Monday, the EIA had forecast that U.S. shale oil and gas production was likely to decline in August for the first time this year, adding to concerns of supply tightness.

Meanwhile, U.S. energy firms this week reduced the number of oil rigs by seven, their biggest cut since early June, energy services firm Baker Hughes said. At 530, the U.S. oil rig count, an early indicator of future output, is at its lowest since March 2022.

UAE Energy Minister Suhail al-Mazrouei told Reuters that current actions by OPEC+ to support the oil market were sufficient for now and the group was "only a phone call away" if any further steps were needed.

Chinese authorities unveiled plans to help boost sales of automobiles and electronics, a move welcomed by investors hoping that it would reinvigorate the country's sluggish economy.

Next week, preliminary purchasing manager surveys from S&P Global (NYSE:SPGI) will be key for investors trying to understand changing global demand, Rob Haworth, senior investment strategist at U.S. Bank Asset Management, said.

Oil rallies for fourth straight week on tightening supply
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Alan Rice
Alan Rice Jul 23, 2023 12:34PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Great Reporting !! Thankyou, Reuters/Inv.com.
Stephen Fa
Stephen Fa Jul 21, 2023 5:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Phil Flynn analysis been on point lately.
Barry Nickerson
Subbuilder Jul 21, 2023 6:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Of course China is buying "like crazy" from Russia.  Russian oil is a bargain compared to the world prices everyone else has to pay.
zakk lio
zakk lio Jul 21, 2023 4:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
On Monday markets will be down because of inflation danger caused by china stimulus!!!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email