(London) Oil continued to rise on Friday, pushed by the production cuts of the two heavyweights of the Organization of the Petroleum Exporting Countries and their allies (OPEC), Saudi Arabia and Russia, but also by possible support for the Chinese economy.
Around 6:45 a.m., a barrel of Brent from the North Sea, for delivery in September, took 1.16% to 80.56 dollars.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery the same month, of which it is the first day of use as a reference contract, gained 1.20% to 76.56 dollars.
“Dropping US oil inventories and voluntary production cuts by major producers such as Saudi Arabia and Russia are supporting the price of oil,” commented Ricardo Evangelista, analyst at ActivTrades.
According to estimates by the London firm Energy Aspects, Russian exports should be reduced by around 400,000 barrels per day in July, then 500,000 barrels per day in August.
Moscow thus seems to be keeping its promise to lower its production announced in March.
Since December, companies based in the EU, the G7 and Australia have been banned from providing services enabling the shipping, including insurance, of crude oil exported by Russia sold at $60 a barrel or more.
Oil prices also benefited from announcements from China, which “on Tuesday pledged to implement policies to ‘restore and expand’ consumption in the world’s largest crude oil importer,” said Mirabaud analyst John Plassard.
Chinese growth, more modest than expected by economists in the second quarter, had fueled fears among investors about the resilience of the country’s demand for crude. The rebound following the end of the very restrictive zero-COVID-19 policy is disappointing.
For now, “the gloomy outlook for the Chinese economy limits upside opportunities,” noted Ricardo Evangelista.
If, according to this analyst, the announcement of “Beijing’s intention to deploy economic stimulus measures has given some hope to oil traders”, the market is still waiting for concrete signs of this support plan.
