Oil ends the week up slightly, reserves are dwindling

(London) Oil prices rose a little more on Friday to end the week up slightly, despite a sharp decline at the start of the week, the decline in commercial reserves taking precedence over concerns for the global economy.


Around 6:20 a.m., a barrel of Brent from the North Sea, for delivery in August, which is the last day of trading, took 0.35% to 75.40 dollars.

Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, rose 0.23% to 70.02 dollars.

Rising since Wednesday and figures showing a sharp decline in commercial crude reserves in the United States, before the summer season synonymous with travel and therefore high consumption, prices held up despite the contraction in manufacturing activity in China.

“It seems that the market wants to believe that the worst is behind it”, and that the global economy will hold up better than expected, said Tamas Varga, analyst at PVM, who notes that US GDP for the first quarter was revised upwards on Thursday.

Concerns about demand are weighing on oil prices: “despite the gains of recent sessions, Brent is off to a fourth consecutive quarter of decline, which would be a record,” said Han Tan, analyst at Exinity.

And according to him, “benchmark oil prices will be under pressure this summer, as central bankers will continue to raise their rates” to stem inflation.

“As long as the market fundamentals do not show a real supply deficit in the second half of 2023, we should not bet on a lasting rise in prices”, he concludes.

Many analysts believe that, even if demand is likely to weaken, supply should be even more reduced, in particular due to the voluntary production limits of the Organization of the Petroleum Exporting Countries and its allies (OPEC+).


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