Oil on track for second straight weekly gain on resilient demand

July 07, 2023 / 8:09 PM
Sharjah 24 – BNA: Oil prices rose slightly on Friday and were on track for their second straight weekly gain, as resilient demand resulted in a larger-than-expected fall in U.S. oil stocks, offsetting fears of higher U.S. interest rates.
Brent crude futures were up 20 cents, or 0.3%, at $76.72 a barrel at 0304 GMT, while U.S. West Texas Intermediate crude gained 19 cents, also 0.3%, to $71.99 a barrel.

Both benchmarks were set to gain about 2% for the second straight week, reports Reuters. 

However, oil price gains were capped by strengthening expectations that the U.S. central bank is likely to raise interest rates at its July 25-26 meeting after holding rates steady at 5%-5.25% in June.

The number of Americans filing new claims for unemployment benefits increased moderately last week, while private payrolls surged in June, data showed on Thursday, raising the likelihood of a Federal Reserve rate hike this month.

OPEC will likely maintain an upbeat view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase, sources close to OPEC said.

Higher interest rates increase borrowing costs for businesses and consumers, which could slow economic growth and reduce oil demand. Investors will look for cues on rate paths from U.S. and China inflation data next week.

July 07, 2023 / 8:09 PM

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