(Bloomberg) — Oil was steady after advancing for a fourth week on signs of a tightening market, with the International Energy Agency warning of higher prices ahead.
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West Texas Intermediate futures traded above $82 a barrel after posting the longest run of weekly gains since June. A surprise production cut by OPEC+ will tighten the market more than previously expected and lead to further price increases, inflicting more pain on consumers, the IEA said on Friday.
Oil has rebounded after a banking crisis that rippled across markets drove futures to a 15-month low in mid-March. Shrinking crude stockpiles at the key US storage hub at Cushing and interruptions to supplies from Iraqi Kurdistan have added to the tightening in global markets.
“OPEC+ cuts have clearly boosted prices,” Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV, said in a note. “However, weaker refinery margins are a concern, signaling weaker demand, particularly for middle distillates.”
Some Asian refiners are considering cuts to crude processing as profit margins shrink, while there’s signs of weakness in the diesel market which may exacerbate slowdown concerns. That could put a cap on further oil-price gains.
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