Crude oil edges higher; potential Russian output cuts help tone By Investing.com

By Peter Nurse 

Investing.com — Oil prices edged higher Friday as the likelihood of hefty cuts to Russian crude exports outweighed rising inventories in the United States and concerns over global economic activity.

By 08:45 ET (13:45 GMT), futures traded 0.2% higher at $75.50 a barrel, while the contract rose 0.2% to $82.33 a barrel.

Helping the market move higher Friday was a Reuters report that stated Russia, the world’s third largest crude producer, plans to cut up to 25% of oil exports from its western ports in March, which is more than the 500,000 barrel per day supply cut that Moscow had announced earlier this week.

Such a move, if the Organization of Petroleum Exporting Countries also continues to cut its output, could result in the market swinging into a deficit later this year, or maybe next, particularly if China, the world’s largest importer, picks up its economic growth after abandoning its Zero-COVID policy.

That said, both benchmarks are still on course to register losses this week, if minor, after the U.S. registered another build in , suggesting a slowdown in demand in the world’s largest consumer.

“Crude oil inventories increased by 7.65MMbbls, the ninth consecutive week of inventory builds,” said analysts at ING, in a note. “Since mid-December, US commercial crude inventories have increased by around 61MMbbls.”

Concerns have also been building that sticky will persuade the to continue with its monetary tightening for longer and to a higher level than previously expected, potentially weighing on future growth.

Additionally, these hikes provide a tailwind for the , making oil, which is denominated in the greenback, more expensive for international buyers.

Data released earlier Friday showed that the , the Fed’s preferred gauge of inflation, rose 0.6% on the month in January, above the 0.4% expected. The climbed 4.7%, above the 4.3% expected.

The , the largest in the Eurozone, shrunk by 0.4% – twice as much as first estimated – in the final quarter of last year, providing a reality check to any optimistic thoughts of an economic recovery in the region.

The rig count – in decline since November – and the round off the week later.