Industry
Oil prices rose higher on Friday, rising near 11-month highs the previous day, as Saudi Arabia’s pledge to make voluntary cuts to its output boosted sentiment in the market despite concerns about slower fuel demand taking advantage.
PHOTO FILE: Overview of the Bayway Oil Tanks and Furnace of Phillips 66 in Linden, New Jersey, USA, March 30, 2020. REUTERS / Mike Segar
TOKYO: Oil prices rose higher on Friday, rising near 11-month highs the day before, as Saudi Arabia’s pledge to make voluntary cuts to its output strengthened sentiment in market although concerns about slower fuel demand reduced benefits.
Brent crude climbed 2 cents to US $ 54.40 a barrel before 0122 GMT, after closing slightly higher the day before. It hit US $ 54.90 on Thursday, the highest level since February.
US West Texas Intermediate (WTI) also received 2 cents to US $ 50.85 a barrel. The contract closed up 0.4per percent on Thursday after also hitting a February high of US $ 51.28.
Both criteria are on track for gains of around 5 percent for this week.
“Oil markets are expected to remain in a bullish tone towards February behind Saudi’s surprising promise to cut yields,” said Kazuhiko Saito, chief analyst at commodity broker Fujitomi Co.
Earlier this week Saudi Arabia, the world’s largest oil exporter, said it would cut production by an additional 1 million barrels per day (bpd) in February and March.
On Thursday, seven North Sea crude shipments were bought and sold in the Platts-run trading window, the highest level trade sources said could reveal tighter supply after the surprising cut.
“But concerns about slower demand for gasoline and other fuels in the United States and other parts of the world due to wider restrictions including the introduction of the COVID-19 pandemic could hamper benefits , “said analyst Fujitomi Saito.
The pandemic still claimed the highest death toll in the U.S., killing more than 4,000 people in a single day, while China accounted for the largest increase in daily cases in more than five months.
U.S. fuel investments rose last week, with gasoline stocks rising 4.5 million barrels, the biggest increase since April, the Energy Information Administration said Wednesday.
But still, the widespread sentiment in global rations, led by Wall Street that hit highs on Thursday, boosted oil prices while markets pledged that a new Democrat-controlled government would provide heavy spending and borrowing to support the US economic recovery.
(Reporting by Yuka Obayashi; Editing by Kenneth Maxwell)