Oil Futures Settle Higher, Post Sixth Straight Weekly Gain
Crude oil prices climbed higher on Friday, extending gains from the previous session, amid tightening supply situation following Saudi Arabia and Russia pledging to cut output through next month.
Oil prices were also supported by a weak dollar. The dollar drifted lower after data showing a smaller than expected increase in U.S. non-farm payroll employment in the month of July raised expectations the Federal Reserve will soon end its interest-rate hiking cycle.
West Texas Intermediate Crude oil futures for September ended higher by $1.27 at $82.82 a barrel.
Brent crude futures were up $0.86 at $86.00 a barrel a little while ago.
“Crude prices are rising as the dollar drops following a mixed NFP report and as OPEC+ remains committed to keeping the oil market tight,” says Edward Moya, Senior Market Analyst at OANDA.
Moya adds that oil is starting to attract more buyers, and the price rally “could continue since the US economy remains resilient and if China’s data next week confirms that part of the world’s crude demand is growing.”
Saudi Arabia on Thursday said it would extend its voluntary oil output cut of 1 million barrels per day for a third month to include September.
The cut “can be extended, or extended and deepened,” according to Saudi Arabia’s state news agency.
Russia’s Deputy Prime Minister Alexander Novak also said that the country would cut oil exports by 300,000 bpd in September.
The Joint Ministerial Monitoring Committee (JMMC) of OPEC+, which met today, affirmed the current levels of oil production of the group and didn’t make any recommendation to change the output at this time.
The panel approved the OPEC+ decisions from June 4, when the current cuts, initially set for May through December 2023, were extended to the end of 2024.
Data released by Baker Hughes said the total number of active drilling rigs in the United States fell by 5 to 659 this week. This week’s count is 416 fewer rigs than the rig count at the beginning of 2019 prior to the pandemic.
The number of oil rigs declined by 4 this week to 525, while the number of gas rigs stayed the same at 128.
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