Oil rallies for fourth straight week on tightening supply

Bengaluru, July 21 (BNA): Oil prices rose nearly 2% on Friday, posting a fourth consecutive weekly gain, supported by mounting evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine which could affect supplies further.

According to Reuters, Brent crude futures rose $1.43, or 1.8%, to settle at $81.07 a barrel, with a weekly gain of about 1.2%. US West Texas Intermediate crude finished $1.42, or 1.9%, up at $77.07 a barrel, its highest since April 25. WTI is up about 2% for the week.

“The oil market is starting to slowly price in on a looming supply crisis,” said Phil Flynn, an analyst at Price Futures Group.

“Global supplies are starting to tighten and that could accelerate significantly in the coming weeks. The increased war risk could also affect prices,” Flynn said.

In the United States, the Energy Information Administration (EIA) said on Wednesday that crude inventories (USOILC = ECI) fell last week, amid a jump in crude exports and an increase in refinery utilization. Earlier on Monday, the Energy Information Administration projected that US shale oil and gas production was likely to decline in August for the first time this year, adding to fears of tight supplies.

Energy services company Baker Hughes said US energy companies this week cut the number of oil rigs by seven, their biggest cut since early June. At 530, the US oil rig count, an early indicator of future production, is at its lowest since March 2022.

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