Oil prices rose nearly 1% on Friday on signs of a slowdown in US production, but both crude benchmarks also ended their longest weekly rally of 2023 on rising concerns about global demand growth.

West Texas Intermediate (WTI) crude futures rose 86 cents, or 1.1%, to $81.25 a barrel, and Brent crude futures rose 68 cents, or 0.8%, to $84.80 a barrel.

Both benchmarks edged higher on Friday after industry data showed the US oil and natural gas rig count, an early indicator of future output, fell for a sixth week in a row. A decline in US production could exacerbate the projected supply tightness for the rest of the year.

Those concerns, driven by production cuts by the Organization of the Petroleum Exporting Countries and allies, helped oil prices rise for seven consecutive weeks since June. Brent crude rose by nearly 18% and WTI by 20% in the seven weeks ending August 11.

However, oil prices declined nearly 2% this week from the previous week as a worsening asset crisis in China raised concerns about the country’s sluggish economic recovery and reduced investors’ risk appetite in the markets. Went.

“Investor concerns are focused on the tension between slowing global growth and still-low global supply,” said Rob Howarth, senior portfolio manager at US Bank Asset Management.

“Prices are likely to remain range-bound for the time being,” Howarth said. He said demand is in question for investors worried about weak data from China.

There is also growing concern that the US Federal Reserve has not finished raising interest rates to combat inflation. Higher borrowing costs can constrain economic growth and in turn reduce overall demand for oil.

Jay Hatfield, CEO of Infrastructure Capital Management, said oil benchmarks fell further on weakness in seasonal demand in the autumn.

Hatfield said he expected demand to remain strong despite China’s slowing economy and oil prices to remain between $75 and $90 a barrel in the coming months.

(Reporting by Shariq Khan; Additional reporting by Natalie Grover, Paul Karsten and Sudarshan Vardan; Editing by Shree Navaratnam, Jamie Freed, Connor Humphreys, Jane Merriman and Barbara Lewis, David Gregorio)

(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content was auto-generated from a syndicated feed.)

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