Investor optimism about the recovery in demand and supply cuts has led to oil prices increasing for the fifth consecutive week. It is anticipated that prices will continue to rise.
Recently, the financial markets have shown an increased appetite for risk. This is due to the growing belief that major central banks, such as the US Federal Reserve and the European Central Bank, are nearing the end of their monetary tightening cycle. This has led to higher expectations for global growth and increased demand for energy.
This week, both benchmarks experienced a five percent increase, which was due to the supply cuts announced by the OPEC+ alliance earlier this month. It’s expected that both benchmarks will register gains of 13 percent for the month.
On Friday, Brent crude increased by 75 cents to reach $84.99 per barrel at close. Similarly, US West Texas Intermediate crude rose by 49 cents to $80.58 per barrel.
Yesterday, Thursday, expectations for demand growth increased as the US gross domestic product grew at a rate of 2.4 percent in the second quarter, surpassing expectations. This supports the view of Jerome Powell, Chairman of the Federal Reserve, that the economy is capable of achieving a “soft landing.”