Oil futures rose slightly early Friday, leaving crude on track for a mixed weekly performance as traders weigh an additional production cut by Saudi Arabia against uncertainty over the outlook for demand.
Price action
-
West Texas Intermediate crude for July delivery
CL00,
+0.36% CLN23,
+0.36%
rose 20 cents, or 0.3%, to $71.49 a barrel on the New York Mercantile Exchange, leaving the U.S. benchmark down 0.3% for the week. -
August Brent crude
BRN00,
+0.34% BRNQ23,
+0.34% ,
the global benchmark, was up 22 cents, or 0.3%, at $76.18 a barrel on ICE Futures Europe, on track for a flat weekly performance. -
Back on Nymex, July gasoline
RBN23,
+0.26%
rose 0.4% to $2.622 a gallon, while July heating oil
HON23,
-0.05%
was up 0.1% at $2.391 a gallon. -
July natural gas
NGN23,
-3.53%
fell 2.6% to $2.29 per million British thermal units, trimming its weekly advance to 5.4%.
Market drivers
Oil prices spiked higher to begin the week after Saudi Arabia last Sunday announced it would voluntarily cut production by an additional 1 million barrels a day in July, with the option to extend the reduction, while the Organization of the Petroleum Exporting Countries and its allies agreed to extend previously agreed cuts through 2024.
Continued uncertainty though over the outlook for global demand was seen keeping a lid on prices, with futures giving back those gains.
Crude prices fell sharply in Thursday’s session after a news report said an interim deal between Iran and the U.S. was imminent that would see Tehran curb its nuclear program in return for an easing of sanctions. Crude bounced after the White House denied the report.
Uncertainty over demand from China continues to limit upside for crude, analysts said. Weaker-than-expected Chinese producer and consumer inflation readings on Friday were seen as a negative.
The country’s producer-price index declined 4.6% from a year earlier in May, compared with the 3.6% decline in April and marking the weakest reading since February 2016. The PPI result was also lower than the 4.3% decline expected by economists polled by The Wall Street Journal.
China’s consumer-price index rose 0.2% from a year earlier in May, up slightly from the 0.1% year-over-year increase in April. Economists had penciled in a 0.3% rise.
“Despite the softer U.S. dollar, the oil price is struggling to gain traction and the latest Chinese data have not helped the cause. The low CPI and PPI prints from China again demonstrate that the global demand outlook for oil is murky at best, which is acting as a constraint on the oil price,” said Tim Waterer, chief market analyst at KCM Trade.
This story originally appeared on Marketwatch
