Oil prices rose on Tuesday, 11/07, supported by supply cuts from the world’s biggest oil exporters and continued hopes for higher demand in developing countries in the second half of 2023.
Brent crude futures were up 46 cents, or 0.6%, to $78.15 a barrel at 08:02 GMT, and US West Texas Intermediate was up 48 cents, or 0.7%, at $73.47.
Supply cuts from top exporters Saudi Arabia and Russia scheduled for August helped lift benchmark prices, which were also supported as the US dollar fell to a two-month low.
A weaker dollar makes crude cheaper for holders of other currencies and often boosts demand for oil.
“Oil has found a floor and the only thing (…) that could break this is if U.S. inflation is sizzling and the Fed is forced to squeeze this economy into a recession,” said Edward Moya, an analyst at OANDA.
While central bank officials have said the Federal Reserve (Fed, the US central bank) is likely to raise interest rates further to tame persistent inflation, markets are somewhat pacified by indications that the months of monetary policy tightening are coming to an end.
“However, nerves are not yet completely calmed. Anxiety that recession fears could lead to downgrades in oil demand is still palpable,” said Tamas Varga, an analyst at PVM.
Still, the International Energy Agency (IEA) is standing firm with the expectation that oil demand from China and developing countries, combined with recently announced supply cuts, will likely keep the market tight in the second half of the year despite a sluggish global economy, its chief said on Monday 10 July.
China’s decision to increase support for its property sector has bolstered hopes for a surge in demand there, analysts said.
O.Económico
