Tighter supplies and slower U.S. inflation helped crude break out of a trading range it had been stuck in for about two months, with Brent crude closing above $80 a barrel for the first time since April
OPEC+ production cuts, as well as slowing Russian flows, are overshadowing a 6 million barrel jump in US crude stockpiles. Slower-than-expected inflation growth and a weaker dollar also helped ease concerns that further interest rate hikes could hurt demand.
“A softer CPI and a weaker dollar helped break crude above some important technical levels,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
Overall, the global market is expected to tighten in the second half, and inventories are expected to be depleted through 2024, according to a report from the Energy Information Administration. The strength is evident in the first-month WTI differential, which has moved 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.
