© Reuters. FILE PHOTO: An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS
By Rowena Edwards
LONDON (Reuters) -Oil prices rose on Friday, and were set to end the week flat after three weeks of decline, as the market balanced supply fears against renewed economic concerns in the United States and China.
futures rose 67 cents, or 0.89%, to $75.65 a barrel by 1415 GMT. West Texas Intermediate (WTI) futures were up 71 cents, or 1%, at $71.58.
Analysts forecast an emerging supply deficit for the second half of the year, even as Iraq’s oil minister Hayan Abdel-Ghani told Reuters on Friday he does not expect OPEC+ to decide on further production cuts when it next meets in Vienna on June 4.
An OPEC report on Thursday said the producer group expects July-December demand for its own crude to be 90,000 barrels per day (bpd) higher than previously projected.
“The oil market is barrelling towards a supply deficit, assuming OPEC delivers on its latest production cuts,” said PVM oil market analyst Stephen Brennock.
Commerzbank (ETR:) analysts, meanwhile, said that “the emerging sizeable supply deficit confirms our expectation of rising oil prices during the course of the year”.
The Organization of the Petroleum Exporting Countries (OPEC) kept its global oil demand forecast for 2023 unchanged on Thursday, expecting economic risks to be offset by higher Chinese demand growth.
The market also drew support after U.S. energy secretary Jennifer Granholm signalled that the country could repurchase oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale next month.
The bullish factors offset mounting concern that the United States – the world’s biggest oil consumer – will enter recession, with talks over the U.S. government’s debt ceiling postponed and concern growing over another crisis-hit regional bank.
The U.S. Federal Reserve will probably need to raise interest rates further if inflation stays high, Fed Governor Michelle Bowman said on Friday, adding that data this month has not convinced her that price pressures are receding.
Meanwhile, China’s April consumer price data rose at a slower pace than in March, missing expectations, while deepening factory gate deflation refocused doubts about its recovery from COVID restrictions driving oil demand growth.
(Reporting Rowena Edwards in LondonAdditional reporting by Yuka Obayashi in Tokyo and Andrew Hayley in BeijingEditing by David Goodman, Kirsten Donovan)
This story originally appeared on Investing
