Oil prices extended gains on Friday and headed for a second straight week, boosted by geopolitical tensions in Europe and the Middle East, concerns about tight supply, and optimism about global fuel demand growing as economies improve.
Oil prices appear poised for further gains in the short term on a more positive economic backdrop, with ongoing supply tightness and rising geopolitical risks.
Brent crude rose 59 cents, or 0.7%, to $91.24 a barrel by 06:46 GMT. West Texas Intermediate (WTI) crude rose 43 cents, or 0.5%, to $87.02 a barrel.
Brent and WTI reached their highest levels since October on Thursday. Both indicators are poised to gain more than 4% this week, rising for a second week in a row after Iran, OPEC’s third-largest producer, vowed revenge on Israel.
Israel has not claimed responsibility for Monday’s attack on Iran’s embassy in Syria, which prompted vows of revenge.
Ukraine’s ongoing drone attacks on refineries in Russia have disrupted more than 15% of Russia’s capacity and negatively affected the country’s fuel production.
OPEC+ kept its oil supply policy unchanged this week and pressured some countries to increase compliance with production cuts. Further restrictions on compliance with quotas could cause production to fall further in the second quarter. Expectations of a tighter market are projected to cause a decline in inventories in the second quarter.
Heavy oil supplies have also tightened globally after Mexico and the United Arab Emirates cut exports of these grades.
This happened amid a strong global oil demand increase of 1.4 million barrels per day (bpd) in the first quarter. High-frequency demand indicators show total oil consumption in March averaged 101.2 million barrels per day, 100,000 barrels above forecasts.
Investors are awaiting the US March employment report due later Friday for more clues about the health of the US economy and the direction of monetary policy.
