Oil prices on track for fourth straight week of gains

On July 5, oil prices declined slightly but remained close to their highest levels since late April, poised for a fourth consecutive week of gains.

The movement was driven by optimistic forecasts of robust summer fuel demand and lingering concerns about supply dynamics, Caliber.Az reports citing the foreign media.

- Brent crude futures decreased by 22 cents, or 0.25 percent, settling at $87.21 per barrel by 1105 GMT.

- US West Texas Intermediate (WTI) crude futures were down nine cents, or 0.11 percent, trading at $83.79 per barrel.

Trading activity was subdued due to the closure of the US market on July 4th for the Independence Day holiday, resulting in no settlement for WTI. Nevertheless, prices have trended upward this week on strong expectations of increased summer fuel consumption in the United States.

PVM oil analyst John Evans commented, "Those who anticipated the arrival of the driving season are proving to be prescient, and the optimistic outlook for bulls in the third quarter appears justified at present."

The US Energy Information Administration (EIA) reported a substantial drawdown of 12.2 million barrels in inventories last week, far exceeding analysts' expectations of a 700,000-barrel draw.

On July 3, US data revealed an increase in initial jobless claims and rising unemployment numbers, prompting analysts to speculate that these trends could prompt the Federal Reserve to accelerate interest rate cuts, thereby bolstering oil markets.

Reuters reported on July 4 that Russian oil giants Rosneft (ROSN.MM) and Lukoil (LKOH.MM) are planning significant reductions in oil exports from the Black Sea port of Novorossiisk in July.

Panmure Liberum analyst Ashley Kelty commented, "This signals a positive outlook for the projected supply deficit in the third quarter. However, given Russia's historical challenges with adhering to production quotas, it remains to be seen whether these cuts will materialize."

The Russian energy ministry stated on July 5 that gasoline production is anticipated to increase by 15,000 to 20,000 metric tons in the latter part of July as two refineries resume operations.

Meanwhile, Saudi Aramco has reduced the prices for its flagship Arab Light crude, slated for sale to Asia in August, to $1.80 per barrel above the Oman/Dubai average. This move highlights the challenges faced by OPEC producers amidst the increasing supply from non-OPEC sources.

Analysts noted that traders were also monitoring developments such as the conflict in Gaza and the elections in France and Britain. In particular, Britain's Labour Party appeared poised for a significant electoral win after 14 years of Conservative rule.