Oil extended gains after a big draw in US crude inventories, while the prospect of a slower pace of interest-rate hikes from the Federal Reserve filtered through markets, buoying commodities.
West Texas Intermediate futures climbed above US$99 a barrel after closing 2.4 per cent higher in the previous session. US crude stockpiles dropped by the most since the end of May, while exports rose to a record, according to government data. Shell Plc’s chief said that oil prices are more likely to rise than fall as the tightness in supply outweighs any risks to demand.
Futures are up around 30 per cent this year despite periods of volatile trading characterized by sharp swings and low liquidity. Supermajors are reporting second-quarter earnings this week and are expected to post bumper profits after energy prices soared. Shell Plc reported a record profit on Thursday.
“Both financial market factors and fundamentals are helping oil today,” said Giovanni Staunovo, an analyst at UBS AG in Zurich. “On the one side there’s the Fed and the weaker dollar, while on the other we have supportive inventory data and diminishing concerns over demand.”Brent for September settlement gained 1.6 per cent to US$108.32 a barrel.
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