On Friday, crude oil prices inched higher due to lower US crude inventories and more robust fuel imports by China.
West Texas Intermediate crude oil futures for September delivery rose by 0.75% to $76.22 per barrel. Likewise, Brent oil contracts went up by 0.59% to $80.11 a barrel on July 21’s Asian afternoon session.
Despite the gains that fuel prices face, a lower demand outlook worries investors. Positive economic data and easing inflation since the Federal Reserve started sharp rate hiking campaigns boosted demand this year.
In addition, the Fed is expected to lift its benchmark overnight interest rate by an additional 25 basis points. Next week, it could hit a 5.25% to 5.50% range for the last time in its cycle.
The previous session showed that prices dropped after data showed US oil storage declined more than analysts expected. According to experts, it was not a big enough draw that markets looked forward to. It was partially caused by lower gasoline demand for this period.
Moreover, the economic recovery in China following its end of COVID-19 restrictions did not meet expectations. Its oil imports year-over-year climbed by almost half in June as stock levels rose close to a record. Traders stated that the Asian country was purchasing discounted crude fuel from Russia.
Supply Tightening Pulled Up Oil Prices
Both significant oil benchmarks, WTI and Brent, gained higher prices as they almost reached a fourth consecutive increase.
In Asia, the fuel witnessed a small weekly gain due to markets dealing with signs of tighter supplies. However, those gains were limited amid a report from China showing a second-quarter gross domestic product growth below expectations.
On the other hand, some oil price hikes were driven by Saudi Arabian and Russian statements about possible production cuts.
Moreover, crude exports from Russia showed signs of decline for the second week straight and forecasted a six-month low. Additionally, it’s preparing for a 500,000 barrels per day cut in its deliveries in August. Also, it plans to deliver on a portion of its pledge to lessen oil exports for the upcoming month.