By Shariq Khan
BENGALURU (Reuters) -Oil prices rose nearly 1% on Friday, buoyed by growing evidence of supply shortages in the coming months and rising tensions between Russia and Ukraine that could further hit supplies.
futures rose 90 cents, or 1.1%, to $80.54 a barrel by 11:36 a.m. EDT [1536 GMT]. U.S. West Texas Intermediate futures rose 97 cents, or 1.3%, to $76.62 a barrel.
“The oil market is starting to slowly price in a looming supply crunch as it is on track for its fourth week of price gains,” said Price Futures Group analyst Phil Flynn.
“Global supplies are starting to tighten and that could accelerate dramatically in the coming weeks. Increased war risk could also impact prices,” Flynn said.
Russia hit Ukrainian food export facilities for a fourth day in a row on Friday and practised seizing ships in the Black Sea, in an escalation of tensions in the region since Moscow’s withdrawal this week from a UN-brokered safe sea corridor agreement.
In the U.S., crude inventories have also fallen, amid a jump in crude exports and higher refinery utilisation, the Energy Information Administration (EIA) said on Wednesday.
Separately on Friday, UAE Energy Minister Suhail al-Mazrouei told Reuters that current actions by OPEC+ to support the oil market were sufficient for now and the group is “only a phone call away” if any further steps are needed.
Meanwhile, investors welcomed stimulus measures designed to reinvigorate China’s sluggish economy. Data from the world’s second-biggest oil consumer suggests the government’s 5% annual growth target will be missed.
On Friday, Chinese authorities unveiled plans to help boost sales of automobiles and electronics.
“We estimate the supply and demand balance for oil in the $75-95 range for 2024, as limited OPEC+ supply and good demand in the U.S. is offset somewhat by weaker-than-expected demand in China as its economic recovery continues to lag,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management.
Read the full article here