Global benchmark Brent crude oil remained above the $81 per barrel mark on Friday, driven by positive sentiment regarding U.S. demand and supply disruptions in Libya and Nigeria.
Both the Brent and U.S. West Texas Intermediate (WTI) contracts have seen continuous gains over the past three sessions. In early Asian trade on Friday, they were set to record a third consecutive week of increases, marking a trend not seen since April.
A local tribe’s protest against the abduction of a former minister led to the shutdown of certain oilfields in Libya on Thursday. Additionally, Shell (LON:RDSa) halted loadings of Nigeria’s Forcados crude oil due to a potential terminal leak.
The disruption in Libya is estimated to have halted 370,000 barrels per day (bpd), while the Nigerian outage has resulted in a loss of around 225,000 bpd, according to Tamas Varga, an analyst at PVM.
Varga emphasized that with the current “tightening” narrative dominating the market, any additional disruptions would drive oil prices to unexpected levels for the second half of the year.
Commerzbank (ETR:CBKG) analysts added that a significant decrease in Russian oil exports, if it persists next week, would likely push prices even higher. Notably, Russian oil exports are expected to be reduced by 500,000 bpd in August.
As of 1013 GMT, both Brent and WTI futures traded steadily, with Brent at $81.36 per barrel and WTI at $76.89 per barrel.
The International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) released reports on Thursday predicting an increase in oil demand in the second half of the year, particularly in China. This positive outlook, despite prevailing macroeconomic challenges, further supported the oil prices.
In a research note, National Australia Bank (OTC:NABZY) expressed its expectation that if OPEC’s forecast materializes, oil prices could soar well above $100 per barrel. The note also highlighted that the weakening U.S. dollar continues to uplift commodity prices.
Markets were buoyed by signs of cooling U.S. inflation, which raised hopes that the U.S. Federal Reserve might be nearing the end of its aggressive monetary tightening campaign, the most rapid since the 1980s.
Furthermore, Saudi Arabia and Russia, the world’s largest oil exporters, recently agreed to deepen their oil cuts, which have been in place since November last year. This agreement provided additional support to crude prices.
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