By Adedapo Adesanya
Oil prices slightly changed on Thursday, the last trading session of the week, but posted a third weekly gain as markets weighed further production cuts targeted by OPEC+ amid falling US oil inventories.
Brent crude rose by 13 cents or 0.2 per cent to trade at $85.12 a barrel as the US West Texas Intermediate crude increased by 9 cents or 0.1 per cent to quote at $80.70.
There will be no trading on the Good Friday holiday.
Both benchmarks jumped more than 6 per cent this week after the Organization of the Petroleum Exporting Countries and allies, including Russia, OPEC+, surprised the market on Sunday with a pledge to production cuts.
Prices drew support from a steeper-than-expected drop and a second consecutive weekly drawdown in US crude inventories last week.
The Energy Information Administration (EIA) on Wednesday reported a crude oil inventory draw of 3.7 million barrels for the week to March 31.
At 470 million barrels, inventories are about 4 per cent above the five-year average for this time of the year.
Last week’s draw compares with a draw of 7.5 million barrels estimated for the previous week, which helped push oil prices higher.
US energy firms this week also cut the number of oil rigs for a second week in a row. The rig count, an early indicator of future output, dropped two to 590 this week.
Limiting gains, economic data from China and the United States has suggested a certain cooling in the rate of post-pandemic recovery, fueling worries about the prospects of oil demand later this year.
US labour market data pointed to slowing economic growth as the number of Americans filing new claims for unemployment benefits fell last week.
Annual revisions to the data showed applications were higher this year than initially thought, further evidence that the country’s labour market was slowing.
Also, there was also slower-than-expected growth in the US services sector.
The Institute for Supply Management (ISM) said its non-manufacturing PMI fell to 51.2 last month from 55.1 in February. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy.
In China, the Caixin PMI reading for March suggested a deceleration of post-pandemic growth.
However, the oil market could strengthen further as Saudi Arabia signalled its confidence that demand would remain resilient despite economic growth worries by raising its official selling prices for Asian buyers. Asia is Saudi Arabia’s biggest export market for crude oil.
