Oil prices hit a 10-month high on Friday, posting a third weekly rise on optimism about a supply squeeze caused by production cuts by Saudi Arabia and Russia and rising demand for Chinese crude.
Brent crude futures rose 23 cents, or 0.3%, to $93.93 a barrel, while West Texas Intermediate (WTI) futures rose 61 cents, or 0.7%, to close at $90.77 a barrel. Both contracts traded at 10-month highs for the fifth consecutive session on Tuesday, gaining nearly 4% on a weekly basis.
Oil prices are on track for the biggest quarterly increase since Russia invaded Ukraine in the first quarter of 2022.
Supply concerns have continued to be a driver for prices since Saudi Arabia and Russia announced this month that they were extending their combined supply cuts of 1.3 million barrels per day until the end of this year.
Better-than-expected industrial production and retail sales data in China also boosted oil prices this week, with the country’s economic conditions critical to oil demand for the rest of this year.
Friday’s data showed Chinese oil refinery output rose nearly 20% from a year earlier as refiners kept run rates high to take advantage of higher global demand for oil products.
Expectations that US oil production will slow have also increased prices in recent weeks. Supply growth in the U.S. appears limited as U.S. producers reduce drilling activity by about 20% from last year’s peak.
The number of oil rigs in the U.S. rose by two this week to 515, the highest since April, according to data released by Baker Hughes on Friday. However, data showed that the number of oil rigs decreased by 84 units compared to a year ago.