Oil headed for a weekly gain after OPEC+ leaders Saudi Arabia and Russia extended supply cuts through year-end and US inventories declined.
(Bloomberg) — Oil headed for a weekly gain after OPEC+ leaders Saudi Arabia and Russia extended supply cuts through year-end and US inventories declined.
West Texas Intermediate declined toward $86 a barrel, after retreating by 0.8% on Thursday as futures had strayed into overbought territory. For the week, the US crude benchmark has risen by almost 1%, rallying at one point on Wednesday above $88 a barrel to the highest level since November.
In the US, data showed nationwide crude stockpiles shrank by 6.3 million barrels to the lowest since December. Gasoline and distillate inventories also declined. The draws coincided with the strongest pace for exports since July.
“If these draws are not a sign of resilient domestic demand in the world’s largest economy, what is?,” said Priyanka Sachdeva, senior market analyst at Phillip Nova Pte in Singapore, referring to the drop the crude holdings. Still, some driving demand may have mellowed after the recent Labor Day weekend, she said.
Oil has rallied this quarter as the OPEC+ supply cuts boosted prices, with underlying metrics including key timespreads signaling a tighter market. Still, some banks remain cautious, with JPMorgan Chase & Co. saying crude is unlikely to see $100 a barrel this year as the demand outlook is challenging.
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