Oil set for best month since early 2022 as market tightens

Oil set for best month since early 2022 as market tightens

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Oil headed for its biggest monthly gain in more than a year on signs the market is tightening, with estimates that crude demand is running at a record clip just as OPEC+ cuts back supplies.

West Texas Intermediate held above $80 a barrel after a run of five weekly gains that lifted prices to the highest since April.

The US crude benchmark has rallied 14 per cent this month, putting it on course for the biggest advance since January 2022. It’s the best performance for July in almost two decades.

“Record high demand and Saudi supply cuts have brought back deficits,” Goldman Sachs Group analysts including Daan Struyven and Yulia Zhestkova Grigsby said in a note that reaffirmed a forecast for Brent at $86 a barrel by December. “The market has abandoned its growth pessimism.”

Oil’s string of advances mean futures in New York have erased their year-to-date losses, with expectations that the Federal Reserve is close to ending its cycle of monetary tightening also aiding sentiment as the dollar weakens.

US employment data due this week is likely to signal a healthy demand outlook, while top importer China presses on with stimulus to boost its economy.

A reduction of supply from