Oil prices climb by two percent on Friday

Oil prices climbed about 2% to a six-week high on Friday as supply concerns outweighed fears that further interest rate hikes could slow economic growth and reduce demand for oil.

Brent futures rose $1.21, or 1.6%, to $77.73 a barrel by 11:06 a.m. EDT (1506 GMT). U.S. West Texas Intermediate (WTI) crude rose $1.23, or 1.7%, to $73.03.

Both benchmarks were on track for their highest closes since May 24 with Brent up about 4% for the week and WTI headed for a weekly rise of about 3%.

On the supply side, top oil exporters Saudi Arabia and Russia announced fresh output cuts this week bringing total reductions by OPEC+, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, to around 5 million barrels per day (bpd), or about 5% of global oil demand.

OPEC will likely maintain an upbeat view on oil demand growth for next year, sources close to OPEC said.

Russia’s latest pledge to reduce oil exports will not require a similar cut in production, a government source added.

Oil analytics firm Vortexa said there are currently 10.5 million barrels of Saudi crude in floating storage off the Egyptian Red Sea port of Ain Sukhna, down by almost half from mid-June.

Reuters/Hauwa Abu