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Oil headed for a fourth straight week of gains, supported by signs of a tightening global market as the International Energy Agency warned of higher prices.
West Texas Intermediate traded near US$82 a barrel, taking its weekly advance to about 2 percent and the longest winning run since June. The rally had been driven by improving fundamentals after OPEC+ cut supplies, with brisk buying seen in both Europe and Asia. Key market timespreads signal firmer conditions.
The Organisation of Petroleum Exporting Countries said Thursday the market was set for a hefty supply deficit that’ll widen as the year progresses. The latest output cuts by the group threaten to boost oil prices for consumers already facing high inflation, the IEA said in its monthly outlook on Friday.
Crude has rebounded strongly since hitting a 15-month low in March as OPEC and its allies surprised the market with a significant output cut. The move lifted prices by the most in a year, punishing speculators betting oil would fall. The gains have also been driven by declining US stockpiles, weaker flows from Russia, and interruptions to pipeline supplies from Iraqi Kurdistan.
The dollar is on course for a fifth consecutive weekly decline — the longest losing streak in almost three years — amid speculation that the Federal Reserve is close to ending its rate-hike campaign. A weaker greenback makes commodities priced in the US currency cheaper for many buyers.
“IEA still sees a tight oil market this year from demand growth and tighter supply,” said Jens Naervig Pedersen, an analyst at Danske Bank A/S. A weaker US dollar has also provided support for oil prices recently, he said. — Bloomberg.
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