A Look Back

The oil market continues to tighten – a fifth straight week of gains – diesel continues its rise.

Crude oil prices saw another weekly rise last week despite The Federal Reserve announcing another interest rate hike.

This should have weighed down on Crude oil gains but growing expectations that central banks such as the U.S. Federal Reserve and European Central Bank are nearing the end of policy tightening campaigns, has boosted the outlook for global growth and energy demand.

Additionally, OPEC+ production cuts announced earlier this month and specifically Saudi Arabia’s cut of 1 million bpd in production have spurred on the rally for crude. Brent crude settled at $84.99 per barrel on Friday displaying a weekly gain of nearly 5%.

A Look Ahead

Saudi Arabia is expected to announce an extension of a voluntary oil output cut of 1 million barrels per day (bpd) for another month to include September at an OPEC + meeting this Friday, further tightening the market. “Oil prices are up 18% since mid-June as record high demand and Saudi supply cuts have brought back deficits, and as the market has abandoned its growth pessimism,” Goldman Sachs analysts.

This has correlated with an increase in diesel/low sulfur gasoil market prices, which determine retail prices that consumers are charged at the pump.

Exxon Mobil (Esso) CEO Darren Woods said the company expects record oil demand this year and next year, and that this may help boost energy prices in the second half of the year.