Crude oil futures saw little change on Friday but were poised to increase for a second consecutive week, driven by signs of rising demand and declining oil and fuel inventories in the United States, the world’s largest oil consumer. Brent futures for August settlement dipped slightly by 18 cents to $85.53 a barrel by 0656 GMT, following a 0.8% increase in the previous session. Similarly, U.S. West Texas Intermediate crude futures for August delivery were down 14 cents to $81.15 per barrel, with the July contract having expired on Thursday at $82.17, marking a 0.7% rise.
Since the beginning of the month, prices have climbed approximately 5%, reaching their highest levels in over seven weeks. According to Citi analysts, the seasonal increase in demand, evidenced by the latest data from the Energy Information Administration (EIA), along with renewed tensions between Israel and Hezbollah and the hurricane season, could sustain price strength throughout the summer.
U.S. government data released on Thursday revealed that total product supplied, which serves as a proxy for the country’s oil demand, surged by 1.9 million barrels per day (bpd) in the week ending June 14, reaching 21.1 million bpd. The EIA reported a drawdown in U.S. crude stockpiles by 2.5 million barrels during the week, bringing the total to 457.1 million barrels, surpassing analysts’ expectations of a 2.2 million-barrel draw. Gasoline inventories also saw a significant decline of 2.3 million barrels to 231.2 million barrels, compared to forecasts of a 600,000-barrel increase.
Demand prospects in other regions also contributed to the upward momentum in prices. Analysts at ANZ Research highlighted that signs of stronger demand in Asia boosted market sentiment, as oil refineries across the region resumed operations after maintenance. Furthermore, data released on Friday indicated that Japan’s core consumer prices rose by 2.5% last month compared to the previous year, up from the previous month. This increase supports the likelihood of the country’s central bank raising interest rates in the coming months.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
