Oil prices set for second week of gains on signs it wants to improve By Reuters
By Laila Kearney and Sudarshan Varadhan
(Reuters) – Crude oil futures were little changed on Friday but were expected to rise for a second week amid signs of improving demand and lower oil and gas prices in the US, the world’s biggest oil importer.
August crude futures were down 15 cents at $85.56 a barrel at 0356 GMT after rising 0.8% in the previous session.
US West Texas Intermediate crude futures for August delivery fell 14 cents to $81.15 a barrel. I
The July contract ended Thursday at $82.17 a barrel, up 0.7%.
Prices rose nearly 5% since the start of the month to their highest level in seven weeks.
“The increase in demand for the year, as shown by the latest EIA data, has reignited the fighting between Israel and Hezbollah, and the hurricane season may hold price power until the summer,” Citi analysts said in a paper.
US government data released on Thursday showed total output, a proxy for national demand, rose by 1.9 million barrels per day (bpd) in the week to 21.1 million bpd.
Data from the Energy Information Administration (EIA) showed inventories fell by 2.5 million barrels in the week ending June 14 to 457.1 million barrels, compared with analysts’ expectations for a draw of 2.2 million barrels.
Gasoline production fell 2.3 million barrels to 231.2 million barrels, the EIA said, compared with forecasts for a 600,000-barrel increase.
Prospects for demand elsewhere also helped prices rise.
“Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idle capacity after repairs,” ANZ Research analysts said.
Data released on Friday showed that Japanese consumer prices last month gained 2.5% from a year earlier, an increase from the previous month and keeping the country’s central bank on track to raise interest rates in the coming months.
Balancing rates is US data released on Thursday showing a drop in new jobless claims, which could lead the Federal Reserve to keep interest rates unchanged. Higher interest rates usually reduce economic growth, and thus the demand for oil.
