Tighter supplies and slower U.S. inflation helped crude break out of the trading range it had been stuck in for about two months, with Brent crude closing above US$80 a barrel for the first time since April.
Production cuts from OPEC+ as well as slowing Russian flows are overshadowing a 6 million barrel jump in U.S. crude inventories. Slower-than-expected inflation growth and a weaker dollar also helped ease worries that more interest rate hikes could hurt demand.
“Softer CPI and weaker dollar helped crude break above some important technical levels,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth.
Overall, the global market is now expected to tighten in the second half and stockpiles are forecast to draw through 2024, according to a report by the Energy Information Administration. The strength is evident in the front-month WTI spread, which has shifted into the most bullish structure since November.
Prices:
- West Texas Intermediate for August delivery rose 92 cents to settle at $75.75 a barrel in New York
- Brent for September delivery rose 71 cents to settle at $80.11 a barrel, the highest close since April 25.
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