Oil futures were slightly higher Friday, on track for weekly gains after data showed further declines in U.S. crude and product inventories this week.
Price action
-
West Texas Intermediate crude for August delivery
CL00,
CLQ23,
rose 30 cents, or 0.4%, to $72.10 a barrel on the New York Mercantile Exchange, on track for a 2% weekly rise. -
September Brent crude
BRN00,
BRNU23,
,
the global benchmark, gained 24 cents, or 0.3%, to trade at $76.76 a barrel on ICE Futures Europe, advancing 1.8% for the week. -
August gasoline
RBQ23,
+0.05%
rose 0.5% to $2.556 a gallon, up 0.5% for the week, while August heating oil
HOQ23,
+0.06%
was up 0.6% at $2.495 a gallon, set for a 1.9% weekly rise. -
August natural gas
NGQ23,
+0.88%
rose 1% to $2.625 per million British thermal units, but headed for a 5.3% weekly drop.
Market drivers
Crude found support Thursday after the Energy Information Administration on Thursday reported that U.S. commercial crude inventories fell by 1.5 million barrels for the week ended June 30. That followed back-to-back weekly declines.
On average, analysts polled by S&P Global Commodity Insights expected the report, to show a decline of 3.6 million barrels.
The EIA report also revealed weekly inventory decreases of 2.5 million barrels for gasoline and 1 million barrels for distillates.
Overall, crude has remained stuck in a trading range, with upside limited by worries over global demand as traders fret over interest rate rises by the Federal Reserve and other major central banks, as well as China’s lackluster economic recovery following the lifting of strict COVID restrictions late last year.
The physical market for crude remains mixed, though prices for Forties crude — the North Sea grade seen as the most important physical marker due to its role in setting the Brent price — has been softening, said Michael Tran, analyst at RBC Capital Markets, in a note.
Given the sluggish physical market over the last few quarters, “it is challenging to have a highly convicted view on deploying upside risk into Brent spreads until there is indication that the physical market is clearing at an accelerated pace,” he wrote. “In the same vein, the soft market pricing appears to be reflecting little room for error.
“We believe that any true signs of physical strength should result in a new strong and swift change in trend for summer pricing,” Tran said.
This story originally appeared on Marketwatch
