Oil gained 6% during a week of trading (Getty Images)
Oil prices rose for the second week in a row today, Friday, to close at the highest level in nearly two months, after US economic growth and indications of a Chinese stimulus package boosted expectations of increased demand.
Tension over supplies from the Middle East also contributed to the rise in prices, despite talk of a crude surplus in the markets.
Brent crude futures rose 1.36% to $83.55 per barrel at settlement, recording their highest levels since last November 30, while US West Texas Intermediate crude rose 0.84% to $78.01, reaching its highest levels at settlement since last November.
The two benchmarks achieved weekly gains of more than 6%, which is the largest weekly increase since the week ending last October 13, after the beginning of the conflict between Israel and the Palestinian Islamic Resistance Movement (Hamas) in the Gaza Strip.
The military spokesman for the Yemeni Houthi group said that the group carried out an operation targeting an oil tanker in the Gulf of Aden, causing a fire to break out on board, which increases fears of supply disruption.
This week, prices received support from a greater-than-expected decline in US crude inventories, and fears of supply disruption after a Ukrainian drone attack on an oil refinery in southern Russia.
Also in the United States, Lael Brainard, Director of the National Economic Council at the White House, said on Friday that Washington risks being exposed to some extent to the economic slowdown in China and shipping disturbances in the Red Sea, but the risks appear to be under control, adding that the situation of the American economy calls for optimism.
A report issued by the American banking group Citigroup expected global oil prices to rise to $90 per barrel due to the continued Israeli aggression on the Gaza Strip and the escalation of geopolitical tensions in the Middle East, specifically in the Red Sea, through which hundreds of ships pass, including those carrying oil.
Surplus in markets
Meanwhile, Alexander Dyukov, CEO of the Russian company Gazprom Neft, said today that the global oil market recorded a slight surplus.
Djukov expected that balance in the market would be achieved due to the supply cuts implemented by the OPEC Plus group - which includes the Organization of the Petroleum Exporting Countries and its allies - starting from the beginning of this January.
Last November, OPEC Plus approved a voluntary production cut of 2.2 million barrels per day during the first quarter of this year.
Saudi Arabia is leading the reduction by about one million barrels per day. The OPEC Plus Joint Ministerial Monitoring Committee is scheduled to hold a meeting next Thursday. Sources in the organization suggested that the committee would decide oil production levels for April and the following months in the coming weeks.
For its part, the Paris-based International Energy Agency said that the expected supplies during 2024 appear to be in good condition, taking into account the conflict in the Middle East and the concerns it raises about supplies.
The agency, which advises oil-consuming countries, stated that the oil market is likely to record a surplus in supplies if OPEC Plus production cuts end by the second quarter of the year as scheduled.
Source: Reuters + German News Agency