WTI crude futures jumped 86 cents to $81.25 a barrel, while Brent crude futures rose 68 cents to $84.80 a barrel. Both benchmarks rose on Friday as industry data indicated that the U.S. oil and natural gas rig count, a leading predictor of future output, declined for the sixth week in a row. A drop …
WTI crude futures jumped 86 cents to $81.25 a barrel, while Brent crude futures rose 68 cents to $84.80 a barrel. Both benchmarks rose on Friday as industry data indicated that the U.S. oil and natural gas rig count, a leading predictor of future output, declined for the sixth week in a row. A drop in US output might worsen the predicted supply shortages for the remainder of the year.
These fears, fueled by output curbs from the Organisation of Petroleum Exporting Countries and its allies, have helped oil prices rise for seven weeks in a row since June. Over the seven weeks through Aug. 11, Brent crude gained around 18% and WTI climbed 20%.
However, oil prices fell roughly 2% this week compared to the previous week, as a growing property crisis in China contributed to concerns about the country’s slow economic recovery and lowered investors’ appetite for risk across markets.
“Concerns for investors remain focused on the tension between slowing global growth and still-tight global supplies,” said senior portfolio manager at US Bank Asset Management. “Prices are likely to remain range-bound for the time being,” he said, adding that investors are concerned about China’s dismal statistics.
Concerns are also growing that the Fed has not yet completed hiking interest rates in order to combat inflation. Higher borrowing rates can stifle economic development, reducing total demand for oil.
According to CEO of Infrastructure Capital Management, oil benchmarks were further impacted by seasonal demand weakening moving into the autumn. He believes that despite China’s weakening economy, demand will remain strong, and that oil prices will trade between $75 to $90 per barrel in the coming months.
Risk disclaimer:
Please note that this article does not offer any instructions or suggestions regarding investment decisions. It is important for you to conduct your own research or seek professional advice from a qualified professional before conducting an investment decision.
