Oil prices rise, but heading for steep weekly losses

Investing.com -- Oil prices rose Friday amid some signs of resilient U.S. demand, although they were nursing steep losses this week as concerns over Middle Eastern supply disruptions cleared.

At 08:10 ET (12:10 GMT), Brent oil futures for August rose 0.6% to $67.07 a barrel, and West Texas Intermediate crude futures rose 0.8% to $65.76 a barrel.

The crude benchmarks have seen gains at the end of the week, helped by data from the U.S. Energy Information Administration showing crude oil and fuel inventories fell heavily a week earlier, with refining activity and demand rising. 

Oil down over 12% for the week as supply concerns clear 

However, the crude contracts were trading down over 12% each this week, having clocked sharp losses after U.S. President Donald Trump announced a ceasefire between Israel and Iran.

The ceasefire, while off to a tenuous start earlier this week, appeared to be holding steadily. 

Trump signaled that Iran could continue selling oil to China– a bearish signal for oil markets– while also touting upcoming nuclear talks with Tehran next week. 

Iran also did not block the Strait of Hormuz as initially feared, keeping oil shipments flowing into Asia and Europe.

Trump administration has no immediate plans to refill SPR

Offering more weak signals for oil, the Trump administration said on Thursday that it has no immediate plans to begin refilling the country’s strategic petroleum reserve.

The SPR is currently at its lowest level since the 1980s after being drawn down sharply by the Biden administration to stabilize U.S. gas prices during the onset of the Russia-Ukraine war in 2022. 

But low SPR levels give the government less emergency reserves to cope with supply shocks or oil price spikes.

OPEC+ to decide production levels

The other focus is what OPEC+ decides on production levels for August, with the group set to make a decision on July 6.

"We’re of the view that the group will continue to aggressively unwind supply cuts and announce another supply hike of 411k b/d for August. These supply hikes should ensure that the oil market moves into a large surplus towards the end of the year. This assumes we don’t see a re-escalation in the Middle East, which would lead to supply losses," analysts at ING said, in a note.

Ambar Warrick contributed to this article