Oil prices have recorded five straight weeks of gains with investors seemingly convinced supply cuts and revived risk appetite in financial markets will cause markets to tighten.
Both major benchmarks will begin trading on Monday having reported a five per cent upsurge from the previous week – and are on track to gain over 13 per cent in prices for the month.
Brent Crude begins the week up 0.89 per cent at $84.99 (£66.16) per barrel, while WTI Crude is up 0.61 per cent at $80.58 per barrel.
This comes with increased sentiment towards investment and economic activity in the US, with growing expectations the Federal Reserve is nearing the end of its 18-month battle with inflation.
Following 10 interest rate hikes, it is only expected to announce one more increase in rates, meaning a peak in pressure on borrowing is now on its way.
Bullish demand expectations were also raised on Thursday after the US revealed that its second quarter GDP grew at a forecast-beating 2.4 per cent – raising hopes of a “soft-landing” for the economy, as targeted by Federal Reserve chairman Jerome Powell.
Meanwhile, China has also pledged to step up stimulus measures to revive the country’s flagging post-Covid recovery.
On the supply side, prices have also been boosted by supply cuts from Opec and its allies (Opec+) alliance announced earlier this month – raising hopes of tightening markets later in the year, in line with Opec and International Energy Association predictions.
This could have seen Opec’s oil production plunge to its lowest level since the autumn of 2021, following declining US inventories and Saudi Arabia’s voluntary cut of 1m barrels per day,
Saudi Arabia is expected to extend its voluntary oil output cut for another month to include September, according to the news agency Reuters, which will also provide fresh support for the oil market.