Oil prices steadied near their highest levels since late April on Friday, and were on track for a fourth straight week of gains, driven by hopes of strong summer fuel demand and some supply concerns.
Brent crude futures rose 8 cents, or 0.1%, to $87.51 a barrel by 1301 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 10 cents, or 0.1%, at $83.98.
With the U.S. market shut on Thursday for the Independence Day holiday, trading was thin and there was no settlement for WTI, but prices have risen this week on strong summer demand expectations in the United States.
“Those who have kept faith that the driving season would eventually come are glowing in prescience and the many calls of a much better path for bulls in the third quarter seem to hold true at present,” said PVM oil analyst John Evans.
The U.S. Energy Information Administration (EIA) reported a huge 12.2 million barrel inventories draw last week, compared with analyst expectations for a draw of 700,000 barrels.
Brent crude oil holds above $87 a barrel
U.S. data on Wednesday showed that first-time applications for unemployment benefits increased last week while jobless numbers also rose, which analysts said could hasten interest rate cuts by the Federal Reserves and support oil markets.
On the supply side, Reuters reported on Thursday that Russian oil producers Rosneft and Lukoil will make sharp cuts to oil exports from the Black Sea port of Novorossiisk in July.
“This is a positive signal for the forecast supply deficit over third quarter, but given Russia’s poor adherence to production quotas in the past, it will take some time to see if this will be delivered,” said Panmure Liberum analyst Ashley Kelty.
Canadian oil producer Suncor Energy shut down its 215,000 barrel-per-day (bpd) Firebag oil sands site in northern Alberta and curtailed some production as a precaution due to a wildfire, according to the company and an Alberta government minister.
Hurricane Beryl, a Category 2 storm, made landfall in Mexico, following its deadly trail of destruction across several Caribbean islands.
Mexico’s major oil platforms are not expected to be impacted or shut down, but oil projects in U.S. waters to the north may be affected if the hurricane continues on its expected path.
Meanwhile, Saudi Arabia’s Saudi Aramco has cut prices for the flagship Arab Light crude it will sell to Asia in August to $1.80 a barrel above the Oman/Dubai average, underscoring pressure faced by OPEC producers as non-OPEC supply grows.
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