Oil prices increased sharply during the week ending Sep. 1 over demand optimism in the US and supply risks triggered by prospective output cuts by the OPEC+ producers.
International benchmark Brent crude traded at $87.86 per barrel at 15.02 p.m. (1202 GMT) on Friday, increasing by around 4% relative to the closing price of $84.48 a barrel on Friday last week.
The American benchmark West Texas Intermediate (WTI) saw gains while trading at $84.64 per barrel at the same time, posting a 6% rise from last Friday’s session that closed at $79.83 a barrel.
Both benchmarks started the week on Monday with limited declines as investors awaited the release of economic data from the world’s largest oil consumers, the US and China.
However, the threat from Storm Idalia, which was moving towards Florida and posing a danger to oil production in the nearby Gulf of Mexico with possible power outages, limited price declines.
Price increases continued on Wednesday over demand optimism in the US as prospects of further interest rate hikes in the country eased following economic data released over the week.
The fall in the US crude oil inventory, reflecting strong demand in the country, supported upward price movements.
Moreover, the military coup in Gabon, a member of the OPEC, created a threat of supply disruption.
A group of senior Gabonese army officers appeared on national television early Wednesday and announced that they had seized power.
However, China’s weak industrial data, which paved the way for demand worries, pressured prices.
On Friday, tight global supply concerns following the news that Russia agreed on further OPEC+ cuts underpinned price increases.
Russia agreed on further curbs to its oil exports with OPEC+ partners, Russian Deputy Prime Minister Alexander Novak said, according to Russian media.
The detail of the plan is expected to be announced next week.
Russia’s statement comes amid market expectations for Saudi Arabia to extend its 1 million barrel per day (bpd) oil supply cut by one month into October.
Earlier this month, Saudi Arabia stated that it would extend its existing output cutbacks of 1 bpd through September. The country originally reduced output in July and extended it through August.
Likewise, Russia announced it would continue to voluntarily reduce oil exports. It said it would reduce exports by 500,000 bpd in August and cut 300,000 bpd in September.
