© Reuters. Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. REUTERS/Stringer
By Natalie Grover
LONDON (Reuters) -Oil prices edged higher on Friday, buoyed by evidence of tightening supplies and economic stimulus in slow-recovering China.
futures were up 71 cents at $80.35 a barrel by 1330 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 69 cents to $76.34 a barrel. Both contracts were up by more than $1 earlier in the session.
“The supply deficit that had been looming in the second half of the year is now backed up by hard figures,” Commerzbank (ETR:) analysts said, citing recent data indicating China and India’s imports of from Russia had hit an all-time high in June.
However, buying interest from India is likely to weaken, given narrowing discounts and payment problems. Meanwhile, in early July Russia joined Saudi Arabia in cutting output for August.
“Demand from China and India could therefore shift more towards other suppliers, which would push up oil prices,” the analysts said.
In the U.S., crude inventories have also fallen, amid a jump in crude exports and higher refinery utilisation, the Energy Information Administration (EIA) said on Wednesday.
“That tightness in supply is already showing up in inventories,” analysts from ANZ Bank said.
Seperately on Friday, UAE Energy Minister Suhail al-Mazrouei told Reuters that current actions by OPEC+ to support the oil market were sufficient for now and the group is “only a phone call away” if any further steps are needed.
Meanwhile, investors welcomed stimulus measures designed to reinvigorate China’s sluggish economy. Data from the world’s second-biggest oil consumer suggests the governments 5% annual growth target will be missed.
On Friday, Chinese authorities unveiled plans to help boost sales of automobiles and electronics.
“The announcement remains short on detail but notions of China buying more cars gives rise in hope for oil investor bulls,” PVM analyst John Evans said.