By Shariq Khan
BENGALURU (Reuters) -Oil prices rose on Friday and were on track for their longest weekly gaining streak since early 2022, after forecasts for tightening supplies from the International Energy Agency (IEA).
Brent crude futures were up 63 cents, or 0.7%, at $87.03 a barrel by 11:58 a.m. EDT [1558 GMT], while U.S. West Texas Intermediate (WTI) crude was up 68 cents, or 0.8%, at $83.50. On a weekly basis, both benchmarks are up about 1%.
The IEA warned that global inventories could fall sharply over the rest of 2023, potentially driving prices even higher, though the agency expects demand growth to slow to 1 million barrels per day (bpd) in 2024, down 150,000 bpd from its previous forecast.
Meanwhile, the Organization of the Petroleum Exporting Countries on Thursday said it expects global oil demand to rise by 2.25 million bpd in 2024, compared with growth of 2.44 million bpd this year. Both forecasts were unchanged from last month.
Thursday’s U.S. consumer prices data for July also lifted market sentiment, as they fueled speculation that the Federal Reserve is nearing the end of its aggressive rate hike cycle.
On the supply side, prices have been supported by extensions to output cuts by Saudi Arabia and Russia alongside supply fears driven by the potential for conflict between Russia and Ukraine to disrupt Russian oil shipments in the Black Sea region.
Supply cuts and improving economic outlook have created more optimism among oil investors in recent weeks, OANDA analyst Craig Erlam said.
He noted, however, there are signs of momentum wearing thin after a sustained rally since June lifted Brent prices to their highest since January on Thursday. WTI hit its highest this year in the previous session.
The last time that Brent rose for seven straight weeks was in January-February 2022, prior to Russia’s invasion of Ukraine.
Mixed economic data from China weighed on sentiment, however. While customs data showed crude imports up year on year, China’s overall exports plunged 14.5% in July, with monthly crude imports retreating from June’s near-record highs to their lowest level since January.
(Reporting by Shariq Khan; Additional reporting by Ahmad Ghaddar and Andrew Hayley; Editing by Elaine Hardcastle and Marguerita Choy)
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