Brent Rebounds, But Still Expected To End The Week On A Loss
Brent crude oil climbed toward $107 on Friday as tightening supply and an improving global demand outlook all lent strength to prices.
The commodity traded at $106.74 at 9:11 GMT on Friday morning after promising data from China boosted confidence that the number two oil consuming nation was headed towards recovery.
Chinese commodity imports all beat expectations and increased in July, with crude oil imports reaching record high levels. Despite that, many are still wary of the nation's appetite for oil as Chinese implied oil demand fell from its four month high in June. The data suggests that August data could show a rise in Chinese stockpiles, which may put pressure on Brent prices in the future.
Tightening supply from OPEC members has also lent support to Brent prices as Libya continues to struggle with protests at several of its largest facilities. CNBC reported that Libyan oil output has been cut to its lowest level since the 2011 civil war, bringing its export figures down to less than half their normal levels. A report from the International Energy Agency also forecast a 500,000 barrel drop in Iraqi oil output as planned maintenance at several shipping terminals in September will interrupt production.
Despite gains from supply issues and a brightening demand outlook, Brent is set to end the week on a loss as investors take profits before the US Federal Reserve begins tapering its stimulus program. Most are betting that the Fed will begin to roll back its $85 billion per month stimulus plan in September, something that will remove much of the liquidity that has underpinned the commodity market.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.