Investing.com — Oil prices rose on Friday and were on track for strong gains in June, as fears of supply disruptions in Russia and the Middle East largely offset concerns about slowing demand.
AT 07:55 ET (11:55 GMT), the stock rose 0.4% to $85.58 per barrel, while it rose 0.4% to $82.09 per barrel.
Crude oil will rise in June on supply fears
Both crude oil benchmarks were expected to rise more than 6% each in June as fears of a wider war between Israel and Lebanese Hezbollah kept markets tense due to disruptions in crude supplies.
Attacks by Ukraine on major Russian fuel refineries also pointed to possible disruptions to oil supplies from Moscow.
The geopolitical conflicts caused traders to place a higher risk premium on oil prices, and also boosted the prospect of tighter markets in the coming months due to oil supply disruptions.
Adverse weather conditions also pointed to more potential supply disruptions, following heavy rains in Ecuador and a possible hurricane on the Gulf Coast.
PCE data can influence sentiment
Also helping the tone is growing confidence in an impending Fed easing cycle, which has led to a risk rally in most markets.
Traders now estimate a 64% chance of a first Fed cut in September, up from 50% a month ago, according to CME’s FedWatch tool.
However, these expectations could be affected by the release of US inflation data on personal consumption, the Fed’s preferred inflation measure, later in the session.
Saudi Arabia could scrap Asian OSPs
On the other hand, Saudi Arabia could cut prices for crude oil it sells to Asia for a second month in August, Reuters reported on Friday, tracking weakness in Middle East benchmark Dubai.
The potential price cut for Asia, which accounts for about 80% of Saudi oil exports, underlines the pressure OPEC producers face as supply from non-OPEC countries continues to grow while the global economy faces headwinds.
The official retail price (OSP) for flagship Arab Light crude sold to Asia in August could fall by 60 cents to 80 cents per barrel from July, possibly to the lowest level since April, according to a Reuters survey.
US producers face investigation into OPEC conspiracy
The US Senate Budget Committee on Thursday launched an investigation into fourteen domestic manufacturers, including ExxonMobil (NYSE:), Chevron (NYSE:) and ConocoPhillips (NYSE:) on possible cooperation with the Organization of the Petroleum Exporting Countries in manipulating oil prices.
OPEC repeatedly cut production over the past year to boost oil prices, although the move had provided only limited support to crude markets.
But prices were boosted by the cartel declaring after a meeting in June that it will maintain current production levels to keep prices supported until 2024.
(Ambar Warrick contributed to this article.)
