Oil prices stabilized after rising for the fourth week, amid indications of tight supplies in the market, with the International Energy Agency warning of higher prices in the future.
West Texas Intermediate futures traded above $82 a barrel, after posting their longest weekly gain since June. The International Energy Agency said on Friday that the sudden production cut by “OPEC +” will make the market tighter than previously expected and lead to more price increases, inflicting more pain on consumers.
Oil rebounded after the banking crisis gripped the markets and pushed futures contracts to a 15-month low in mid-March. Shrinking crude stocks at the main US storage hub at Cushing and disruptions to supplies from Iraqi Kurdistan have created even more tight supplies in global markets.
“OPEC + cuts are clearly supportive of prices.. However, weaker refining margins are a concern, which indicates weak demand, especially for middle distillates,” according to Warren Patterson, head of commodity strategic analysis at IE. ING Groep NV.
Some Asian refiners are considering reducing crude oil processing operations as profit margins shrink, while there are signs of weakness in the diesel market that could exacerbate slowdown fears. That could cap gains in oil prices.
