Oil headed for more than 7 percent weekly gains as the continued cut in Iraqi exports tightened the market ahead of US inflation data.
U.S. crude futures were steady at over $74 a barrel on Friday after closing nearly 2 percent higher in the previous session.
It does not seem likely that Iraq’s oil exports of approximately 400,000 barrels per day through Turkey will continue due to the inability to resolve the conflict between Baghdad and the Iraqi Kurdish Regional Government.
It pointed to a stronger recovery in March as production continued to grow in China and construction gained momentum. Market watchers are pricing in that the recovery in the country will help support higher prices this year.
The worst of the turmoil is considered to be behind, although oil is on the path of loss for the fifth month in a row due to the banking crisis that intensified earlier this month. On the other hand, the strikes in France, which reduced the demand for Russian supply and crude oil, which remained strong, were also effective in increasing the downward trend.
As Fed officials reiterate the need to curb inflation, investors will watch US inflation data on Friday for clues on the course of tightening. Although one of the topics to be followed next week is the OPEC+ meeting, no change is expected in the production quotas of the union.
Vishnu Varatha, Head of Economy and Strategy at Mizuho bank Asia, said, “Like the story about the cooling of inflation, the decreasing banking risks also provide vitality. If you add to this the supply risks and the less tense oil, the upside resistance is likely to break.”
US crude oil for May delivery was trading at $74.37 a barrel.
Brent oil for May delivery fell 0.3 percent to $79.04 a barrel.