NEW YORK: Oil prices edged up on Friday, putting both benchmarks on track for a fifth consecutive week of gains on expectations demand growth will outstrip supply and OPEC+ producers will be cautious in returning more crude to the market from August.
Brent futures rose 32 cents, or 0.4%, to $75.88 a barrel by 11:28 a.m. EDT (1528 GMT), while US West Texas Intermediate (WTI) crude rose 57 cents, or 0.8%, to $73.87. That puts both benchmarks on track for their highest closes since October 2018. For the week, both contracts were up about 3%, putting them on track for their fifth week of gains in a row.
"Oil prices have been supported in recent weeks, benefiting from the ongoing decline in global oil inventories as oil demand continues to grind higher, although unevenly," said UBS analyst Giovanni Staunovo.
Oil prices also found support as the approval of a US infrastructure bill boosted optimism over the energy demand outlook, analysts said. Also boosting oil prices was a decline in the dollar on Friday after data showed that US consumer spending was flat in May, while producer price inflation came in below economists' expectations.
A weaker greenback makes oil less expensive in other currencies, which could boost demand. Energy traders noted the market would be watching for the release of the Baker Hughes North American rig count at 1 p.m. ET for signs the rise in crude prices would prompt US energy firms to drill for more oil.
Looking ahead to next week, all eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies - together called OPEC+ - who are due to meet on July 1 to discuss further easing of their output cuts from August.
"The producer group has ample space to boost supply without derailing the drawdown in oil stocks, given the rosier demand outlook," said Stephen Brennock of oil broker PVM.
On the demand side, the key factors OPEC+ will have to consider are strong growth in the United States, Europe and China, bolstered by vaccine rollouts and economies reopening, according to analysts who said this was countered by rising Covid-19 cases and outbreaks in other places.