Oil is on track to end the week little changed, after touching the highest level since November in recent days, as the International Energy Agency’s monthly snapshot pointed to a robust market.
(Bloomberg) — Oil is on track to end the week little changed, after touching the highest level since November in recent days, as the International Energy Agency’s monthly snapshot pointed to a robust market.
West Texas Intermediate futures traded near $83 a barrel, virtually flat on the week. Global oil demand has surged to a record amid robust Chinese consumption, the IEA said. It followed a report from OPEC that suggested a sharp supply deficit of more than 2 million barrels a day this quarter.
Oil has rallied since late-June on cuts from Saudi Arabia, aided by export curbs from OPEC+ ally Russia. Traders are also continuing to monitor the wider economic outlook, as the impact of the Federal Reserve’s aggressive rate-hiking cycle continues to ripple through markets, but JPMorgan said Friday that prices could reach $90 by September.
“We believe prices will continue to climb from here towards $90,” analysts including Natasha Kaneva wrote in a note, referring to the Brent benchmark. “Key market gauges are pointing to a rapidly tightening physical market.”
Iran has moved four US citizens from prison to house arrest, the first step of an emerging deal between Washington and Tehran that could eventually see more barrels from the OPEC producer hitting the market.
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The tightness is flowing through to downstream fuel markets, with a type of petroleum left over from oil refining costing more than crude in Europe for the first time in decades. Prices of gasoline and diesel are also well above seasonal norms, partly as a result of refinery output curbs.
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