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Oil prices poised for fourth week of gains

Oil prices poised for fourth week of gains
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A silhouette of the towers and chimneys of an oil refinery in Melbourne, on June 21, 2010. REUTERS/Mick Tsikas/File Photo

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  • OPEC+ capacity constraints increase focus on limited supply
  • Brent crude hits two-month high
  • China agrees with the United States on the sources of release of oil reserves

LONDON (Reuters) – Oil futures rose on Friday and braced for a fourth week of gains, buoyed by supply constraints and a weak dollar, although an imminent release of crude reserves from China loomed.

Brent crude futures rose 85 cents, or 1%, to a two-month high of $85.32 a barrel at 0955 GMT. US West Texas Intermediate crude rose 58 cents, or 0.7%, to $82.70.

Crude oil prices turned positive as the dollar headed for what could be its biggest weekly drop in over a year. A weak dollar makes goods more accessible to holders of other currencies.

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Several banks have forecast oil prices at $100 a barrel this year, with demand expected to outpace supply, not least with a focus on production capacity constraints among OPEC+ countries. Read more

“When you consider that OPEC + is still close to pumping its total share, this tightening could be the most bullish factor for oil prices over the coming months,” said Stephen Brennock, analyst at BVM.

However, gains were limited after Reuters reported that China plans to release oil reserves near the Lunar New Year holiday between January 31 and February 6 as part of a plan coordinated by the United States with other major consumers to lower global prices, the sources said. . Read more

The US Energy Department said Thursday it has sold 18 million barrels of strategic crude oil. Read more

China also recorded its first annual decline in crude oil imports in two decades, although traders are expecting imports to recover this year. Read more

There were also concerns about fuel demand in the world’s second largest oil consumer, as the highly contagious omicron coronavirus variant spread to the cities of Dalian and Tianjin. Read more

Several cities, including Beijing, have also urged people not to travel during the Lunar New Year holidays, which could reduce demand for transportation fuels during the peak travel season.

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(Coverage) Shadia Nasrallah in additional coverage Florence Tan Editing David Goodman

Our Standards: Thomson Reuters Trust Principles.

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