April 14 (Reuters) – Oil prices rose on Friday on signs
of lower Russian output and tighter supplies, with the market
looking ahead to the International Energy Agency’s (IEA) monthly
report later in the day to clarify the global demand outlook.
Brent crude futures climbed 34 cents, or 0.39%, to
$86.43 per barrel by 0347 GMT. West Texas Intermediate crude
futures (WTI) rose 40 cents, or 0.49%, to $82.56.
Both benchmarks fell more than 1% in the previous session.
“Russian exports are showing signs of weakening as
production is reported to have been curtailed by 700,000 barrels
per day (bpd),” said analysts from ANZ Bank in a client note.
Investors, though, are also focused on the IEA’s monthly oil
market report to be released later on Friday. The possibility
that the agency might downgrade the global demand outlook over
faltering macroeconomic growth is helping to cap prices.
A report from the Organization of the Petroleum Exporting
Countries (OPEC) released on Thursday pointed to downside risks
in summer demand, citing a weaker growth backdrop, tighter
monetary policy and instability in the global financial sector.
Chinese trade data on Thursday, however, showed that crude
imports by the world’s second-largest oil consumer rose 22.5%
year-on-year in March, stoking bullish sentiment regarding
China’s economic recovery.
“Despite renewed economic pressures in the U.S. and Europe,
global demand for mobility fuels has increased 2.2 million bpd
during the reference week ending April 8, compared to year-ago
levels,” JP Morgan analysts said in a client note.
A rebound in China along with other Asia countries accounted
for two-thirds of global mobility fuel demand growth, the
analysts said.
Friday morning’s marginally higher levels come at the end of
a week in which both benchmarks reached their highest levels in
more than two months on decelerating U.S. inflation data and a
weakening dollar.
WTI has jumped 2% so far this week and Brent is 1.3% higher,
with both heading for a fourth straight week of gains.
The U.S. dollar index was trading at roughly a
one-year low, after U.S. consumer and producer price data
releases this week raised expectations that the Fed was
approaching the end of its rate hiking cycle.
The weakening greenback makes dollar-denominated oil cheaper
for investors holding other currencies, boosting demand.
Analysts say current prices could be close to a technical
ceiling, however.
“It looks like the rally in crude prices has finally hit a
wall,” OANDA analyst Edward Moya said in a note.
Oil prices are expected to record an upward trend but the
increments are expected to be capped at $90 a barrel, said CMC
Markets analyst Leon Li.
(Reporting by Andrew Hayley in Beijing and Trixie Yap in
Singapore; Editing by Sonali Paul and Tom Hogue)
