Crude Starts Session Up, Supply & More Moderate Fed Outlook Supportive

Oil prices rose over 1% on Friday to end the week higher again as supply tightens. WTI has started the week stronger again. The USD index finished down 0.5%, which supported crude, following softer than expected US payrolls. The end of week rally was driven by Saudi Arabia and Russia announcing the extension of their output cuts into September. OPEC+ will keep its quotas for the rest of 2023.

• WTI rose 1.3% to finish the week 2.6% higher at $82.64/bbl. It reached a high of $83.24/bbl and then eased with weaker equity sentiment. It is currently higher at $82.94, close to Friday’s high and approaching resistance at $83.59, 7 Nov 2022 high. Brent rallied 1.1% to $86.05 after a high of $86.65 which broke resistance of $86.18 and opened up $90.
• As the market tightens, Saudi Arabia has increased most prices to Europe and Asia but left them unchanged to the US. Light crude to Asia was lifted 30c to $3.50/bbl above benchmark but 50c had been expected, according to Bloomberg. Saudi has said that it could extend its output cuts beyond September.
• Bloomberg Economics has estimated that Saudi may need oil prices at $100/bbl to meet government spending.