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Oil prices rose for a fourth week in a row as the US Gulf Coast refineries began restarting, though gains were capped as investors shifted their focus from Hurricane Laura toward the slowing rebound in consumption.
The oil futures market has been trading in a narrow range for weeks with crude propped up by inventory drawdowns and high OPEC compliance with its production cut.
Prices squeezed out a small gain for the second straight week, but uncertainty around the US-China trade deal and fears of a resurgent pandemic limited the price rally.
Prices edged up to the highest since March last week on a larger-than-expected inventory draw, a slightly improved US jobs report, and hopes for a new stimulus package from Washington.
Oil posted a small gain in July, boosted by a steadily weakening dollar and OPEC’s restraint. Deep output curbs by OPEC+ have helped futures rebound from their plunge below zero in April, yet the unprecedented cuts will ease this month.
Oil edged higher last week with a weaker dollar overshadowing signs of a slowing global economic recovery. The dollar weakening to the lowest since January boosted the appeal of commodities priced in dollars.
Oil prices edged lower on Friday as concerns increased about the surge in coronavirus cases sapping fuel demand while major crude-producing nations report sharp increases in output.
The resurgence of coronavirus cases in parts of the world is “casting a shadow” over the oil market’s nascent recovery, the International Energy Agency warned last week.
Crude hit four-month highs on Thursday, aided by a tightening market and a better-than-expected US jobs report. The caveat is that the jobs survey took place before the latest Covid-19 wave and the associated business closures.
Oil posted its second weekly loss for the month as a surge in US coronavirus cases casts doubts on the market’s prospects for recovery. New York futures closed at $38 and London at $41 on Friday.
New York oil futures rose 2.3 percent on Friday to close at $39.75, the highest level since March 6th. The 9.6 percent increase for the week marks the seventh gain in the last eight weeks.
Oil futures fell by some 8 percent last Thursday, before closing out a quiet Friday at $36.26 in New York and $38.73 in London. Over the previous six weeks, prices have been climbing due to the OPEC+ and US shale production cuts, and the easing of pandemic lockdowns in China, Europe, and North America.
