Oil posted a second straight weekly gain after supply curbs from OPEC+ leaders Saudi Arabia and Russia were extended for the rest of the year.
(Bloomberg) — Oil posted a second straight weekly gain after supply curbs from OPEC+ leaders Saudi Arabia and Russia were extended for the rest of the year.
Adding to an already constrained fuel market, Russia plans to reduce diesel exports from its key western ports by a quarter this month and keep more supplies at home because of seasonal refinery maintenance. The news sent diesel futures rallying, outpacing gains in crude.
Underlying metrics across the oil market complex are signaling tighter conditions after OPEC+ leaders extended their production cuts. West Texas Intermediate’s December-December timespread, a favored trade of oil hedge funds, strengthened to the widest since late 2022.
Oil remains higher this quarter amid the OPEC+ supply cuts. Still, some banks remain cautious, with JPMorgan Chase & Co. analysts including Natasha Kaneva saying crude is unlikely to see $100 a barrel this year amid restrained demand. With OPEC+ decisions now known, the outlook will shift to how central banks will continue to combat inflation.
“Oil prices continue to grind higher, defying negative risk sentiment and the strong US dollar,” said Jens Pedersen, director of oil and commodities research at Danske Bank. “Tight supply will stay a key driver, but from next week, big rate decisions from ECB and Fed will likely steal attention.”
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