West Texas Intermediate oil futures rose above $80 a barrel for the first time since April as OPEC+ curbs tighten global supplies and US economic growth outpaced expectations.
(Bloomberg) — West Texas Intermediate oil futures rose above $80 a barrel for the first time since April as OPEC+ curbs tighten global supplies and US economic growth outpaced expectations.
The world’s largest economy expanded at a larger annualized rate than analysts expected in the second quarter. There’s also been growing speculation the Federal Reserve is nearing the end of its monetary tightening cycle after it raised interest rates Wednesday for the 11th time since March 2022.
Oil has broadly rallied since late June, aided by supply cuts from the Organization of Petroleum Exporting Countries and its allies, and signs that Russian seaborne crude exports are falling. But higher fuel prices are likely to add a renewed inflationary impetus to the global economy, with gasoline surging around the world.
“From a fundamental perspective the recent price uptick has been driven primarily by OPEC+’s voluntary production cuts,” UBS analysts, including Giovanni Staunovo, wrote in a note. “In the months ahead oil markets should tighten further.”
Saudi Arabia is expected to extend its 1 million barrel-a-day oil supply cut into September as it seeks to foster a tentative recovery in prices, according to a Bloomberg survey. With Russia also curbing output, banks including Standard Chartered Plc anticipate a deepening shortfall in the coming months.
Meanwhile, US crude stockpiles fell by 600,000 barrels last week, and inventories at the storage hub in Cushing, Oklahoma, dropped to the lowest since May, data from the nation’s Energy Information Administration showed.
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