Oil Reaches Monthly High as OPEC+ Leaders Tighten Crude Exports

Oil posted a second weekly gain as evidence mounted that the decision by OPEC+ leaders Saudi Arabia and Russia to tighten supplies was making a mark across physical markets.

(Bloomberg) — Oil posted a second weekly gain as evidence mounted that the decision by OPEC+ leaders Saudi Arabia and Russia to tighten supplies was making a mark across physical markets.

West Texas Intermediate settled near $74, the highest in over a month, supported by risk-on sentiment on Friday. Crude posted its first back-to-back weekly increase since May, with near-term time spreads flipping into a narrow backwardated structure, a bullish pricing pattern.

Saudi Arabia set large price increases for its crude to Europe and the Mediterranean after announcing an extension into August of its unilateral 1-million-barrel-a-day supply cut. The costlier Saudi grades are pushing refineries across the Atlantic Basin to seek alternatives, causing the price of Norway’s North Sea crude to surge.

Crude remains down about 10% this year, with tighter monetary policy, China’s lackluster recovery, and resilient Russian exports pressuring futures. This week’s price rise came despite a broad move lower in other risk assets, as robust US jobs numbers reinforced bets the Federal Reserve will keep hiking interest rates.

US job gains slowed last month, according to data released Friday, but wage growth remained strong, reinforcing expectations of interest rate hikes.

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