By Adedapo Adesanya
Brent crude prices rose by $1.16 or 1.9 per cent to $88.59 per barrel on Friday, buoyed by expectations of tightening supplies, as the US West Texas Intermediate crude (WTI) grew by $1.39 or 1.8 per cent to $85.02 per barrel.
Saudi Arabia is widely expected to extend a voluntary 1 million barrel per day oil production cut into October.
This move will prolong supply curbs introduced by the Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) to support prices.
Russia, the world’s second-largest oil exporter, has already agreed with OPEC+ partners to cut oil exports next month, Deputy Prime Minister Alexander Novak said on Thursday.
Brent rose about 4.8 per cent this week, the most it has increased in a week since late July. WTI advanced by 7.2 per cent in the week, its biggest weekly gain since March.
Support also came as the appetite for oil in the US remained strong. According to the US Energy Information Administration (EIA), commercial crude inventories declined in five of the most recent six weeks.
Gabon, which produces around 200,000 barrels per day, suffered a coup on Wednesday and will likely not see its operations negatively impacted.
However, analysts say this may change if external forces attempt to intervene or unless the coup loses strength and the situation descends into civil war.
The military officers who launched the coup have now announced that the country’s transitional junta leader is General Brice Clotaire Oligui Nguema, who happens to be a cousin of the ousted President Ali Bongo.
A US report on Friday showed a rise in the unemployment rate and moderation in wage growth. This bolstered expectations of a pause in interest rate hikes.
Meanwhile, expectations for demand recovery elsewhere are growing.
A downturn in eurozone manufacturing eased last month, suggesting the worst may be over for the bloc’s beleaguered factories.
Meanwhile, an unexpected rebound in China offered some hope for export-reliant economies, private surveys showed.
Both OPEC and the International Energy Agency (IEA) are depending on the world’s biggest oil importer, China, to shore up oil demand over the rest of 2023. However, the sluggish recovery of the country’s economy has investors concerned.
Modupe Gbadeyanka