Oil headed for a weekly surge of about 9% as disruptions to Iraqi exports tightened the market and worries about the economy eased after lower-than-expected US inflation.
(Bloomberg) — Oil headed for a weekly surge of about 9% as disruptions to Iraqi exports tightened the market and worries about the economy eased after lower-than-expected US inflation.
West Texas Intermediate futures traded above $75 a barrel Friday. If the gains hold, it will be the biggest weekly rise this year. Prices have been supported by the shutdown of about 400,000 barrels a day of Iraqi flows amid a dispute between Baghdad and the Kurdistan region.Â
Also lending support, a key gauge of US inflation rose last month by less than expected, suggesting the Federal Reserve may be close to ending its most aggressive cycle of interest-rate hikes in decades. This could help fuel a return of the bulls to the oil market, who fled en masse following the banking turmoil, market participants said.Â
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
Yet China’s recovery has gathered pace, with manufacturing continuing to expand and construction picking up. Most market watchers are betting the nation’s rebound will help to underpin higher oil prices later this year.
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–With assistance from Natalia Kniazhevich.
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