Oil headed for a third weekly gain as supply disruptions in Africa and a reduction in shipments from Russia tightened the market.
West Texas Intermediate futures traded near $77 a barrel on Friday and are around 4% higher this week. Libya’s second-biggest oil field is in the process of shutting due to protests, while there’s also a production halt in Nigeria. That follows signs that resilient Russian flows are finally starting to ease.
Crude remains marginally lower this year and the International Energy Agency said Thursday that global demand won’t grow as fast as previously expected in 2023, although the agency still sees record demand. The market is expected to tighten in the second half, aided by supply cuts from Saudi Arabia and Russia.
The Organization of Petroleum Exporting Countries expects an even tighter global oil market next year, a view more bullish than other forecasters. World oil consumption will climb by 2.2 million barrels a day to reach 104.3 million a day, OPEC said on Thursday in its first detailed assessment of 2024.
Crude prices have “some room to run, with the oil balance looking increasingly tight for the remainder of the year,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV. “However, from a technical point of view, the market is likely to face some strong resistance at the 200-day moving average.”
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The US benchmark has surpassed its 50 and 100-day moving averages in quick succession following recent prices gains, with futures now testing the 200-day moving average. WTI hasn’t breached that threshold since August, although futures came close in April.
