WTI crude rose above 65 dollars per barrel on Friday to its highest level since early August and set for its strongest weekly gain since early June as supply constraints and demand expectations tightened the market.
The rally was supported by export disruptions and pipeline issues amid Russia’s curbs on diesel and gasoline including a partial diesel export ban announced by Deputy Prime Minister Alexander Novak and an extension of a gasoline ban, and OPEC plus producing only about 75 percent of planned increases leaving a shortfall of nearly 500 thousand barrels per day.
US crude inventories also posted a surprise drop while Chinese stockbuilding and steady consumption in energy intensive sectors lifted forward demand.
Offsetting these bullish forces was the return of Kurdish exports and reduced expectations for aggressive US rate cuts which tempered the outlook for economic growth and fuel consumption.