Oil settles on 3rd straight weekly gain after hitting 3-month high; check key triggers for crude next week
₹6,204 per bbl, having swung between ₹6,175 and ₹6,321 per bbl during the session so far, compared to their previous close of ₹6,246 per bbl. The U.S. dollar index edged higher after hitting a 15-month low during the session, as investors consolidated ahead of the weekend.
A stronger greenback reduces oil demand, making crude more expensive for investors holding other currencies. ‘’Next week, the rally could resume as easing inflation, plans to refill the U.S. strategic reserve, supply cuts and disruptions could support the market, Rob Haworth, senior investment strategist at US Bank Wealth Management told news agency Reuters.
“While oil prices are likely slightly overbought in the very near term, touching the highest levels since early May, the bias appears to be for a grind higher," he added. Oil prices gained nearly two per cent on a weekly basis, after supply disruptions in Libya and Nigeria heightened concerns that the markets will tighten in coming months. Several oilfields in Libya were shut down because of a local tribe's protest against the kidnapping of a former minister.
Separately, Shell suspended loadings of Nigeria's Forcados crude oil owing to a potential leak at a terminal. The Libya disruption is halting an estimated 370,000 barrels per day (bpd) while the loss from the Nigerian outage is pegged at 225,000 bpd, PVM analyst John Evans told Reuters. Russian oil exports have also decreased significantly and, if this trend continues next week, it would probably drive prices up further since Russian oil exports are set to be reduced by 500,000 bpd in August, according to Commerzbank analysts.
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