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Oil rose on Friday, cementing a gain for the week, as macroeconomic trends suggested stronger demand globally. Crude has gotten a lift from signals that China’s usage will continue to grow, indications that the US driving season will be robust and expectations that the Federal Reserve’s pause in interest rate increases will provide the economy some temporary relief. Still, the rally is being capped as stockpiles continue to swell despite Saudi-led OPEC+ production cuts. The production cuts, along with lost Russian barrels and wildfires in Canada have contributed to tightness in the heavy, sour crude market, but that has been partly balanced by ample availability of light, sweet grades from US shale producers, according to Greg Sharenow, managing director at Pacific Investment Management Co. This bifurcation has confused the market, he said. Adding to this confusion are mixed signals from the physical market. Refinery outages in the US and Europe are threatening to further increase crude inventories at key hubs, including Cushing, Oklahoma, where stockpiles already are at the highest in two years. West Texas Intermediate is down 11% for the year. “The oil market is very fragile, and refinery outages will disrupt the rebound that is starting to […]
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