Investing.com -- Crude oil prices weakened Friday, but still remained on course for a fifth straight week of gains on growing optimism for global economic growth and tightening supplies.
By 09:40 ET (13.40 GMT), the U.S. crude futures traded 1.2% lower at $79.13 a barrel, while the Brent contract dropped 0.9% to $83.00.
Both contracts were set to add more than 2% this week, their fifth straight positive week, having climbed to three-month highs during the previous session.
Central banks nearing end of tightening cycle
Both the U.S. Federal Reserve and the European Central Bank again lifted their benchmark interest rates this week, but expectations are growing that the end of their year-long tightening cycles is near, boosting risk appetite.
Data released earlier this week showed that the U.S. economy grew more than expected in the second quarter, raising hopes that the world’s largest economy can avoid a recession this year, boosting the outlook for global growth and energy demand.
Crude producers to cut supplies in August
Oil markets have also received a boost for most of this month from the decisions of a couple of the world’s biggest oil exporters, Saudi Arabia and Russia, to further reduce their production levels, starting in August.
“The Saudis will be happy to see Brent trading back above US$80/bbl with their additional voluntary cut of 1MMbbls/d starting to have its desired effect,” analysts at ING said, in a note.
“However, the broader OPEC+ cuts are leading to some distortions within the market … and this is evident in the unusual discount that Brent continues to trade at relative to Dubai.”
This month could see OPEC oil production plunge to its lowest level since the autumn of 2021, noted Commerzbank.
Looking for additional Chinese stimulus
Investors are also looking to Beijing for additional stimulus with the world's second-largest economy, and biggest crude importer, struggling to recover from its COVID hit.
China’s housing minister on Friday called for new measures, such as lower home mortgage rates and down payment ratios for first-time home buyers, to help the struggling property sector.
The Chinese economy grew just 0.8% in the April-June period, and a more comprehensive stimulus package looks likely in the near future.