Crude oil futures enjoy modest gains to end the trading week, with the US benchmark flirting with $80 a barrel again. Oil prices had come under pressure on on-again, off-again war risk premiums. However, the energy commodity is looking to carve out momentum on global supply concerns.
June West Texas Intermediate (WTI) crude oil futures rose $0.65, or 0.82%, to $79.88 per barrel at 18:03 GMT on Friday on the New York Mercantile Exchange. US crude will post a weekly gain of 0.4%, adding to its year-to-date increase of 12%.
Brent, the international benchmark for oil prices, eyed $84 to finish the week. July Brent crude futures advanced $0.59, or 0.71%, to $83.86 a barrel on London’s ICE Futures exchange. Brent soared 1.3% this week and is up nearly 9% year-to-date.
Market watchers say that oil found support on a softer consumer price index (CPI) report, which fueled expectations that the Federal Reserve could start cutting interest rates by September.
Industry analysts also argue that crude jumped on lower commercial US crude inventories. As FX Daily Report noted:
“According to the US Energy Information Administration (EIA), domestic inventories of crude oil plunged 2.508 million barrels for the week ending May 10, down from the previous week’s drawdown of 1.362 million barrels. This was worse than the consensus estimate of a withdrawal of 1.35 million barrels.
Gasoline supplies tumbled 235,000 barrels, down from the previous week’s build of 915,000 barrels. The market had forecast a supply injection of 880,000 barrels.
Distillate stockpiles decreased by 45,000 barrels while heating oil inventories decreased by 680,000 barrels.”
Meanwhile, better-than-expected Chinese industrial production, which surged 6.7% year-over-year in April, lifted oil prices on expectations of growing demand in the world’s second-largest economy. At the same time, slowing retail sales capped possible gains.
In the US, the Baker Hughes Oil Rig Count edged up by one to 497 for the week ending May 17, up from 496 in the previous week. The number of active drilling rigs has been below 500 all month.
In other energy markets, June natural gas futures rose $0.111, or 4.45%, to $2.606 per million British thermal units (Btu). June gasoline futures rose $0.0321, or 1.26%, to $2.5699 a gallon. June heating oil futures added $0.0415, or 1.7%, to $2.4852 per gallon.