Oil prices on track for second weekly profit in row

Oil prices rose in European trade on Friday after a pause from gains yesterday on profit-taking off three-week highs, while on track for the second weekly profit in a row. 

The gains were boosted by Saudi energy minister's remarks this week, and a steep drop in US crude stocks, in a positive sign of demand in the US. 

Global Prices

US crude rose 1.1% to $72.66 a barrel, while Brent climbed 1.3% to $76.93 a barrel, with a session-low at $75.71. 

US crude tumbled 3.25% on Thursday, while Brent shed 2.8%, the first loss in four days off three-week highs. 

Weekly Trading

Global prices are still up 1.25% so far this week on track for a solid weekly profit. 

Saudi Remarks 

Saudi energy minister warned short sellers of oil from upcoming "pain", which was taken as a sign of a potential new cut to output by OPEC+ at the June meeting. 

US Stocks

The Energy Information Administration reported a steeo drop of 12.5 million barrels in US crude stocks last week, while analysts expected an increase of 1.9 million barrels.

Gasoline stocks are now down 2.1 million barrels to 216.3 million barrels, while distillate stocks are down 600 thousand barrels to 105.7 million barrels.

The IEA

The EIA warned in its last monthly meeting of an upcoming shortage that might occur in the second half of the year, with demand expected to surpass supplies by nearly 2 million bpd.

The increase is mainly fuelled by improving Chinese demand, in addition to steep output cuts by OPEC+.

US Demand

US demand is also improving as seasonal demand grows on gasoline starting next week in the US.