Brent oil prices top $94 a bbl, up for a third week on supply curbs

Brent oil headed for a third weekly gain as the market continued to tighten on the back of supply curbs from Saudi Arabia and Russia. The global crude benchmark traded near $94 a barrel Friday after closing up 2 per cent a day earlier.

The International Energy Agency and Organization of Petroleum Exporting Countries both warned this week that the market would be in deficit through year-end, helping push prices about 3 per cent higher since last Friday’s close.
 

On the demand side, the picture has brightened on signs the US may be able to avoid a recession, while data from China on Friday beat economists’ estimates, suggesting the worst of the downturn is passing. The tightening market is also reflected in surging fuel prices, with diesel at a seasonal record in New York.
 

 

Crude in London has jumped more than 30 per cent since mid-June, with analyst predictions of $100 a barrel becoming less rare. Still, there are technical indications that the rally is overdone. Brent’s 14-day relative strength index has been above the threshold signaling a potential pullback for much of the past two weeks. “Crude flat price and structure continues to rip,” said Keshav Lohiya, founder of consultant Oilytics.