Futures Movers: U.S. oil higher after snapping 9-day winning streak

Posted By: EN Todayon: September 08, 2023In: General Energy News, Oil & Gas News

Oil futures rose Friday, on track for strong weekly gains after trading near 2023 highs, as tightening supplies outweighed worries about demand from China and the global economy.

Price action

West Texas Intermediate crude for October delivery
CL00,
+0.79%

CL.1,
+0.79%

CLV23,
+0.79%
rose 55 cents, or 0.6%, to $87.42 a barrel on the New York Mercantile Exchange, on track for a 2.2% weekly gain.
November Brent crude
BRN00,
+0.82%

BRNX23,
+0.82%,
the global benchmark, was up 70 cents, or 0.8%, at $90.62 a barrel on ICE Futures Europe, headed for a 2.3% advance on the week.

Market drivers

WTI on Thursday snapped a nine-day winning streak, while Brent ended a seven-session run of gains. Both grades ended Wednesday at their highest since 2023.

Gains this week came after Saudi Arabia announced it would extend a production cut of 1 million barrels a day, which took effect in July, through the end of the year, while Russia said it would also extend supply cuts.

Monthly reports from the International Energy Agency, the Organization of the Petroleum Exporting Countries and the U.S. Energy Information Administration will be closely watched next week, said Barbara Lambrecht, commodity analyst at Commerzbank, in a Friday note.

“Until now, the International Energy Agency has presumably been assuming that the voluntary cuts would be gradually withdrawn from October and that global supply would fall 1.3 million barrels per day short of demand in the fourth quarter. At just shy of 2 million barrels per day, the deficit is now likely to be almost as high as in the current quarter,” she wrote. “This should lend good support to prices, as industrial stocks will consequently fall further behind the five-year average in the coming months.”