TOKYO — Oil prices edged higher in early trade on Friday, extending a rally into a third day, as investors weighed hopes for strong fuel demand after a larger-than-expected drawdown in US crude stocks, brushing off worries about a global economic slowdown.
Brent crude futures climbed 7 cents, or 0.1%, to $96.66 a barrel by 0030 GMT after settling 3.1% higher on Thursday. US West Texas Intermediate crude was at $90.65 a barrel, up 15 cents, or 0.2%, following a 2.7% increase in the previous session.
Still, the benchmark contracts were headed for weekly losses of about 1.5%.
“The oil market gained as bullish US weekly data bolstered optimism for improved fuel demand for the near-term,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
“But lingering recession fears and a possible increase in output by OPEC+ will likely limit upside,” he said, referring to the Organization of the Petroleum Exporting Countries (OPEC) and partners, collectively known as OPEC+.
US crude inventories fell sharply as the nation exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding heavy demand from European nations looking to replace crude from warring Russia.
US crude stocks fell by 7.1 million barrels in the week to Aug. 12, Energy Information Administration data showed, against expectations for a 275,000-barrel drop.
US oil refineries plan to keep running near full throttle this quarter, according to executives and estimates, as refiners set aside worries about recession and sliding retail prices to deliver more fuel.
OPEC’s new secretary general, Haitham Al Ghais, told Reuters that policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not his group.
At its next meeting on Sept. 5, Al Ghais said OPEC+, which includes other oil suppliers such as Russia, “could cut production if necessary, we could add production if necessary… It all depends on how things unfold.”
OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al Ghais said.
Russia forecasts rising output and exports until the end of 2025, an economy ministry document seen by Reuters showed, saying revenue from energy exports will rise 38% this year, partly due to higher oil export volumes.
Iran, meanwhile, increased its oil exports in June and July and could raise them further this month by offering a deeper discount to Russian crude firms for its main buyer China, tracking the flows said. (Reporting by Yuka Obayashi; Editing by Christopher Cushing)