Oil prices climbed about 2% on July 7 to a six-week high as market supply concerns outweighed concerns that further interest rate hikes could slow economic growth and reduce oil demand.<\/p>\n\n
Brent crude futures were up $1.41, or 1.8%, at $77.93 a barrel at 1:39 p.m. Et (1739 GMT) on July 7. U.S. WTI rose $1.51, or 2.1%, to $73.31.<\/p>\n\n
Both benchmarks are on track for their highest close since May 24, and both are up about 4 percent for the week.<\/p>\n\n
Erlam, senior market analyst at OANDA, said the rally in oil prices in the week or so leading up to July 7 was quite strong and supported by momentum, in addition to the impact of a new round of production cuts on the market.<\/p>\n\n
Two major oil exporters announced new production cuts this week, bringing total output cuts by Opec +, Opec and its Allies to about 5 million barrels a day, or about 5 percent of global oil demand.<\/p>\n\n
Analysts at U.S. financial services firm Morning star said in a note that Opec + production cuts are expected to tighten the market and drive a supply shortage in the second half of 2023, supporting higher oil prices.<\/p>\n\n
Sources close to Opec said that Opec is likely to maintain an optimistic view of oil demand growth next year.<\/p>\n\n
According to oil analysis firm Vortexa, 10.5 million barrels of Saudi crude are now in a floating storage facility near Egypt’s Red Sea port of Ain Sukhna, down nearly half from mid-June.<\/p>\n\n
Energy services firm Baker Hughes said U.S. energy companies added oil and gas RIGS for the first time in 10 weeks, the biggest weekly increase in natural gas RIGS since October 2016.<\/p>\n\n
In Norway, Equinor ASA suspended production at its Oseberg East field in the North Sea due to staff shortages.<\/p>\n\n
The dollar fell to a two-week low on July 7 after data showed U.S. job growth was weaker than expected but still strong enough to prompt the Federal Reserve to resume raising interest rates later this month, as it has signaled.<\/p>\n\n
A weaker dollar makes crude cheaper for holders of other currencies, which could boost oil demand.<\/p>\n\n
James Knightley, chief international economist at ING, said in a note that the weaker-than-expected jobs report took some of the steam out of recent market moves, but the labor market remains too tight to predict a Fed rate hike in July.<\/p>\n\n
According to CX’s FedWatch Tool, the market’s probability of the Fed raising rates by 25 basis points at its July 25-26 meeting is now around 95 percent, up from 92 percent before the jobs and economic data.<\/p>\n\n
Higher borrowing costs could slow economic growth and reduce oil demand.<\/p>\n\n
In Europe, decades of stubbornly high inflation and the effects of geopolitical conflicts have forced companies to freeze hiring and lay off workers.<\/p>\n\n
In Germany, a quick recovery appeared less likely after data showed an unexpected fall in industrial production.<\/p>\n","protected":false},"excerpt":{"rendered":"
Oil prices climbed about 2% on July 7 to a six-week high as market supply concerns outweighed concerns that further interest rate hikes could slow economic growth and reduce oil demand. Brent crude futures were up $1.41, or 1.8%, at $77.93 a barrel at 1:39 p.m. Et (1739 GMT) on July 7. U.S. WTI rose …<\/p>\n