Oil prices are set for a fourth straight weekly increase during the week ending July 5 over rising demand hopes as the summer driving season begins and supply woes triggered by growing tensions in the Middle East.
International benchmark Brent crude traded at $87.33 per barrel at 3.18 p.m. local time (1218 GMT) on Friday, rising by around 1.06% relative to the closing price of $86.41 a barrel on Friday last week.
West Texas Intermediate (WTI), the American benchmark, traded at $83.79 a barrel at the same time on Friday, an increase of about 2.75% from last Friday's session, which closed at $81.54 per barrel.
Both benchmarks started the week on a positive note over rising demand hopes and global supply concerns.
Summer driving season in the US, the world's biggest oil consumer, began with the Independence Day holiday on July 4. The American Automobile Association expects overall travel during the holiday period to be 5.2% higher than in 2023, and car travel is forecast to increase by 4.8% compared to last year.
Tensions have soared along Lebanon's border with Israel amid cross-border attacks between the Lebanese Hezbollah group and Israeli forces as Tel Aviv presses ahead with its deadly offensive on the Gaza Strip, which has killed more than 38,000 people since last October.
Yemen's Houthi group continues to target cargo ships owned or operated by Israeli companies or transporting goods to and from Israel in solidarity with the Gaza Strip in the Red Sea, which is crucial for being one of the world's most frequently used sea routes for oil and fuel shipments.
The fall in US commercial crude oil reserves reflected market perceptions of strengthening domestic demand. Data released by the American Petroleum Institute late Tuesday showed a decrease of 9.16 million barrels in US crude oil inventories.
Oil prices largely handed back early gains later on Tuesday over a potential supply disruption due to Hurricane Beryl but remained near two-month highs.
Although concerns eased after the US National Hurricane Center said the storm was expected to weaken when it entered the Gulf of Mexico, economic data released in the US put downward pressure on oil prices by causing economic and demand concerns among market players.
Official statistics from the Energy Information Administration (EIA) released late Wednesday portrayed a positive demand outlook and limited further price losses. Figures showed that US commercial crude oil stocks decreased by around 12.2 million barrels, while gasoline inventories fell by about 2.2 million barrels.
Meanwhile, uncertainty over the timing of the US Federal Reserve's (Fed) first interest rate cut this year continues to weigh on prices.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr