NRGU - U.S. crude oil benchmark closes above $80 for the first time since April

2023-07-27 18:45:39 ET

U.S. benchmark WTI crude oil settled above the $80/bbl mark Thursday for the first time in three months, supported by supply tightness following recent production cuts from Saudi Arabia and Russia, and the U.S. reported its economy grew by a greater than expected 2.4% in the last quarter.

China's pledge earlier this week to boost policy support for the economy also has sparked hopes for greater oil demand from the world's largest crude importer.

Crude oil pulled back Wednesday from recent gains after weekly government data showed smaller than expected declines in inventories of crude, gasoline and distillates.

Front-month Nymex crude ( CL1:COM ) for September delivery closed +1.6% to $80.09/bbl, and September Brent crude ( CO1:COM ) also finished +1.6% to $84.24; for both benchmarks, it was the highest settlement value since April 18 and their fifth gain in the past six sessions.

ETF: ( NYSEARCA: USO ), ( BNO ), ( UCO ), ( SCO ), ( DBO ), ( USL ), ( DRIP ), ( GUSH ), ( USOI ), ( NRGU )

UBS analysts said the oil market is undersupplied, and looks for Brent crude to rise to $85-$90 in the coming months .

The bank projects a market deficit of 700K bbl/day in June and ~2M bbl/day in July and August, as the extra 1M bbl/day cut by Saudi Arabia takes effect.

"With demand growing at a solid pace, the ongoing removal of barrels is gradually pushing prices up," UBS wrote.

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