Oil nears April peak as supply tightens.

Oil Climbs as Supply Tightness and Optimism Drive ‌Prices Higher

By​ Alex‍ Lawler

LONDON (Reuters) – Oil climbed almost 1% on Thursday, recouping losses‌ from the previous session, supported by supply tightness owing to OPEC+ production cuts and ​renewed optimism on the‌ outlook for Chinese demand​ and global growth.


Crude has posted four consecutive‌ weekly gains on an expected tightening of supply because of output ⁢cuts by the ⁢Organization of the Petroleum Exporting Countries (OPEC)‍ and its​ allies,‍ known collectively as OPEC+,‍ as well ‌as some involuntary outages.

Brent crude advanced 65 cents, or 0.8%, to $83.57 a⁤ barrel by 1034 GMT​ while U.S. West Texas Intermediate (WTI) crude rose 92 cents, ⁤or ⁢1.2%, ​to $79.70.⁢ Intra-day peaks for both contracts were near⁢ their highest since April ⁤19.

“We ⁤see the oil market undersupplied,” UBS analysts said in a report. “We retain⁣ a positive​ outlook and look for Brent to rise to $85–90 over the coming months.”

Still, oil dropped ⁢on Wednesday after data showed⁤ U.S. crude‍ inventories fell less than expected and⁣ the U.S. Federal Reserve raised interest rates by a quarter of a percentage point, leaving ⁢the door open to another increase.

“While‍ the consensus broadly expects demand ​to exceed ​supply for the remainder of this year, oil‍ prices themselves have so far refrained from providing ‌a signal of such a fundamental⁤ trend,” said Norbert Ruecker of Swiss bank Julius Baer.

Risk appetite ‌in ​wider ⁣financial markets is being boosted by growing hopes that central banks such as the Fed are nearing⁢ the⁤ end of ‌policy tightening ⁣campaigns, which would boost the outlook for global growth and energy demand.

The European Central Bank, also viewed as approaching⁢ the end‌ of its tightening cycle, is expected to raise interest rates for the ninth time in a row on Thursday.

A pledge on⁣ Monday from China to boost policy⁤ support for the economy has spurred hopes of ⁢oil demand regeneration from the world’s largest crude importer, Phillip Nova ⁣analyst Priyanka Sachdeva said‌ in⁤ a note.

Coming​ into⁤ focus ⁣is an Aug. 4 meeting of key ⁤OPEC+ ministers⁢ to review the market.

⁣(Reporting⁤ by Alex LawlerAdditional reporting⁤ by⁣ Katya Golubkova in Tokyo and Muyu Xu in SingaporeEditing by David Goodman)

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Read More From Original Article Here: Oil climbs close to April peak on tighter supply

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