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Producer output cuts fuel oil prices to their sixth weekly gain

Aug 4, 2023

By: BlinkX Research Team

Oil prices are rising for the second day, heading towards a sixth consecutive week of gains, following commitments from Saudi Arabia and Russia to cut output through the coming month. As of 0042 GMT, Brent crude futures for October climbed 30 cents to $85.44 a barrel, while U.S. West Texas Intermediate crude for September rose 36 cents to $81.90.

Brent futures are set for a 0.4% weekly gain, with WTI expected to close the week up 1.4% higher after U.S. crude inventories saw their largest-ever fall on Wednesday.

The assurance of supply cuts from Saudi Arabia and Russia, known as OPEC+, has bolstered prices. Though the OPEC+ Joint Ministerial Monitoring Committee is unlikely to make significant output policy changes at the Friday meeting, the announcements from Saudi Arabia and Russia have raised concerns about supply disruptions.

Market worries about demand persist due to recent U.S. economic data indicating tight labor markets and a slowing service sector. Additionally, the downturn in euro zone business activity and the Bank of England's recent key interest rate hike may impact oil demand, with higher borrowing costs potentially affecting economic growth.

Content source: Media reports