On Friday, oil prices reached their highest point in ten months as a result of China reducing the amount of cash reserves that banks were required to hold in order to support its economic recovery and amid anticipation that the major cycles of global interest rate hikes were coming to an end.
West Texas Intermediate (WTI) crude in the United States increased by 0.6% to $90.74 while Brent crude increased by 46 cents, or 0.5%, to $94.16. Both benchmarks were trading at their best levels since November.
Oil prices are expected to rise for a third consecutive week as a result of ongoing supply concerns, forecasts that the U.S. central bank will maintain rates, and indications that Europe’s Thursday rate hike would be the last. The cost of borrowing goes up with higher interest rates, which might slow economic development and lower demand for oil.
The extended oil production restrictions by Saudi Arabia and Russia, according to the International Energy Agency, are anticipated to cause a market deficit through the fourth quarter. A negative report on U.S. inventories caused a momentary drop in prices, but supply concerns quickly caused them to rise again.
