Oil Rises Amid Surging Summer Demand, Oversupply Upsets

On Friday, oil prices surged for four consecutive weeks, fueled by hopes of solid summer crude demand and supply worries.

In the Asian afternoon session, Brent futures ending in September rose by 0.14% to $87.55 a barrel, and West Texas Intermediate (WTI) increased by 0.32% to $84.15 per barrel.

Reports indicate that oil prices are on track for four consecutive weeks of solid gains, with the market anticipating oil supply tightening in the coming months.

According to reports, crude prices were trading between 3.00% and 4.00% this week, significantly rising amid increasing bets that oil demand will recover during the travel-heavy summer season.

However, data reveals that robust demand has led to a significant depletion in US crude stockpiles over the past week as oil retailers gear up for holiday travel. This week, a substantial drop in fuel inventories is also expected, which could further impact oil prices.

Analysts noted that solid mobility indicators and sharpening Middle East geopolitical tension have supported market sentiment this week.

Moreover, worries continue over the supply downturns in the Mideast, seeing investors a more considerable risk premium to oil costs as pressures between Israel and Lebanon’s Hezbollah conflict soften.

OPEC Glut and Sluggish Economic Data Cool Oil Gains

It remains uncertain if oil prices will continue to surge, particularly with recent data from the Organization of Petroleum Exporting Countries (OPEC) indicating increased production.

Moreover, worries about sluggish economic growth in significant oil consumers like the US and China stayed in play, especially after weak readings on non-manufacturing purchasing managers index data.

Analysts also noted that traders were in sight of the Gaza war and elections in France and the UK.

Meanwhile, the US Federal Reserve’s hawkish interest rates have pressured the crude market. At the same time, investors were focused ahead of nonfarm payrolls data due on Friday, which is set to hint at more cues in Washington’s economy.

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