(New York) U.S. oil prices ended Friday at their highest closing level in three months, in a market that is increasingly convinced that Saudi Arabia and Russia will honor their commitments to cut volumes.
The price of a barrel of Brent North Sea oil for September delivery rose 1.79% to close at $81.07.
Its American equivalent, the barrel of West Texas Intermediate (WTI) of the same maturity, which was the first day of use as a benchmark contract, gained 1.87%, to 77.07 dollars, a high since the end of April at the close.
“The market has OPEC production cuts in mind,” a group formed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC agreement, described Andy Lipow, of Lipow Oil Associates.
Saudi Arabia announced in June that it would cut production by a million barrels a day in July, before pledging to do the same in August, while Russia promises to cut its exports by 500,000 barrels a day next month.
“Saudi Arabia seems to be sticking to its announcements, and shipping data shows a decline in Russian exports,” Andy Lipow said.
“Supply can be expected to contract even further in August, with a further decline in Russian exports,” Commerzbank analysts said in a note.
Still on the supply side, the United States has seen the number of wells in operation fall to their lowest level in 16 months, down nearly 15% since the start of the year.
The rise in prices nevertheless remains limited by the uncertainty that still hangs over global demand, which the Chinese component is questioning, as operators await government stimulus measures.
On Friday, Chinese authorities announced initiatives to revive vehicle sales in the country, but so far moves to boost consumption and credit have been measured, far from the support expected by investors.
Traders will follow a series of PMI activity indicators next week that will provide insight into the health of the global economy, says Edward Moya of Oanda.
In addition, several oil groups must publish their quarterly results, in particular ExxonMobil, Shell or Chevron, and should communicate, on this occasion, their forecasts for the months to come.