Oil rose on Friday, extending the biggest rally in six weeks, as macroeconomic trends suggested stronger demand globally.
(Bloomberg) — Oil rose on Friday, extending the biggest rally in six weeks, as macroeconomic trends suggested stronger demand globally.
Crude has gotten a lift from signals that China’s usage will continue to gain, indications that the US driving season will be robust and the Federal Reserve’s pause in interest rate increases will provide the economy some temporary relief. Still, the rally is being capped as stockpiles continue to swell despite Saudi-led OPEC+ production cuts.
Refinery outages in the US and Europe are threatening to further increase crude inventories at key hubs, including Cushing, Oklahoma, where stockpiles already are at the highest in two years. Crude is down 11% this year.
“The oil market is very fragile, and refinery outages will disrupt the rebound that is starting to take hold for crude prices,” said Ed Moya, senior market analyst at Oanda Corporation.
Rising inventories at Cushing will push Brent spreads lower because WTI is now included in dated Brent pricing, said Rebecca Babin, a senior energy trader at CIBC Private Wealth.
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