Oil on Track for 5th Week of Gains

LONDON—Oil prices were steady on Friday, but on track for a fifth straight week of gains with investors optimistic healthy demand and supply cuts will keep prices buoyant.

Risk appetite in wider financial markets has been fuelled by growing expectations that central banks such as the Fed and European Central Bank are nearing the end of policy tightening campaigns, boosting the outlook for global growth and energy demand.

Bolstered by supply cuts from the OPEC+ alliance announced earlier this month, both oil benchmarks are on track for a 3.6 percent weekly increase—a fifth straight week of gains.

By 1059 GMT, Brent crude slipped 37 cents to $83.87 a barrel, while U.S. West Texas Intermediate (WTI) crude dipped 30 cents to $79.79 a barrel.

Bullish demand expectations were boosted on Thursday after U.S. second quarter gross domestic product grew at a forecast-beating 2.4 percent, supporting Federal Reserve Chairman Jerome Powell’s view that the economy can achieve a so-called “soft landing.”

Investors are warming up to the idea of peak rates getting ever closer, while it is looking increasingly probable that the United States will avoid recession, said PVM analyst Tamas Varga.

Fresh data released on Friday showed some of the eurozone’s top economies displayed unexpected resilience in the second quarter even as a raft of indicators pointed to renewed weakness ahead, as manufacturing ails and services slow.

On the supply side, evidence of tightening is mounting, given declining US inventories and Saudi Arabia’s voluntary cut of 1 million barrels per day, Commerzbank analysts said, highlighting this month could have seen OPEC oil production plunge to its lowest level since the autumn of 2021.

It would “take a brave man to bet against re-visiting the 2023 summit set at $89.09” a barrel for Brent oil in January, PVM analyst Tamas Varga added.