Oil prices rose on Friday amid concerns about shrinking supply, as the market awaited the International Energy Agency’s (IEA) monthly report later in the day to clarify the global demand outlook.
Brent crude futures rose 36 cents, or 0.42%, to $86.45 a barrel as of 0600 GMT. West Texas Intermediate crude futures (WTI) rose 43 cents, or 0.52%, to $82.59 a barrel.
Both benchmarks fell more than 1% in the previous session. WTI is up 2% this week and Brent is up 1.3%, both heading towards their fourth straight weekly gains.
Investors are also focused on the IEA’s monthly oil market report, which will be released on Friday. The possibility of the institution lowering its global demand outlook due to weakening macroeconomic growth is helping to contain prices.
A report by the Organization of the Petroleum Exporting Countries (OPEC) on Thursday pointed to downside risks to summer demand, citing weaker growth ground, tighter monetary policy, and instability in the global financial sector.
Russian exports are showing signs of weakening as production is reported to have been cut by 700,000 barrels per day.
But Thursday’s trade data from China showed that the world’s second-largest oil consumer’s crude imports rose 22.5% year-on-year in March, adding to the positive mood for China’s economic recovery.
Despite renewed economic pressures in the US and Europe, global demand for mobility fuels increased by 2.2 million barrels per day during the reference week ending April 8, compared to levels a year ago.
Analysts said a recovery in China, along with other Asian countries, was responsible for two-thirds of global activity fueling demand growth.
With the marginally higher levels on Friday morning, slowing US inflation data, and a weakening dollar, it came to the end of a week when both benchmarks reached their highest levels in more than two months.
The release of the US dollar index this week raised expectations that the Fed is nearing the end of its rate hike cycle.
The weakening dollar increases demand, making dollar-denominated oil cheaper for investors holding other currencies.
However, analysts think current prices may be close to the technical ceiling. It looks like the rally in crude oil prices has finally hit the wall.
According to some, oil prices are expected to show an upward trend, but increases are expected to be limited to $ 90 per barrel.
