Oil headed for its biggest weekly gain of the year as disruptions to Iraqi exports tightened the market and inflation came in lower than expected to ease some economic worries.
(Bloomberg) — Oil headed for its biggest weekly gain of the year as disruptions to Iraqi exports tightened the market and inflation came in lower than expected to ease some economic worries.
Crude prices have risen more than 9% this week, the most since Oct. 2022. The rally has been fueled by the shutdown of about 400,000 barrels a day of Iraqi flows amid a dispute between Baghdad and the Kurdistan region. Also lending support, a key gauge of US inflation rose less than expected last month, suggesting an ending in sight of interest rate hikes from the Federal Reserve.
Despite this week’s surge, oil is still on track for a fifth monthly loss, primarily due to the banking crisis that rippled through markets in recent weeks, though the worst of the turmoil appears to be over. Resilient Russian oil supply and strikes in France that have curbed crude demand have restrained oil from breaking into the $80 range.Â
Goldman Sachs Group Inc. sees current prices as a buying opportunity for investors, said Jeff Currie, global head of commodities at the bank. The bank forecasts solid inventory draws this summer as China’s rebound takes on steam, boosting investor sentiment.
Read more: Goldman Sees Buying Opportunity in Oil’s Recent Dip
Energy Daily, Bloomberg’s energy and commodities newsletter, is now available. Sign up here.
–With assistance from Natalia Kniazhevich.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.