Oil rose on Friday, supported by expectations that OPEC’s decision to raise production targets a little more than planned will not significantly affect tight supply in global markets and increase demand as China eases restrictions from Covid-19.
The OPEC Plus bloc, which includes the Organization of Petroleum Exporting Countries (OPEC) and independent oil producers, including Russia, decided to increase production by 648,000 barrels per day in July and August, instead of 432,000 barrels per day, according to a previous agreement.
Brent futures settled at $119.72 a barrel, up by $2.11, or 1.79%, and US oil futures settled at $118.87 a barrel, up by $2, or 1.71 percent.
The support also came from high demand and with daily COVID-19 cases declining, China’s financial hub Shanghai and the capital, Beijing, eased anti-coronavirus restrictions this week and the Chinese government pledged support to stimulate the economy.
US stock down
Thursday’s weekly inventory report showed US crude stocks fell by 5.1 million barrels, a more-than-expected increase, and gasoline stocks were also down, confirming the supply shortage.
“It is still likely that OPEC + will supply much less oil to the market than agreed, and therefore will not bring the hoped-for breakthrough,” said Carsten Fritsch, an analyst at Commerzbank, in a report.
(Archyde.com)
