Crude futures edged higher Friday as Germany's leadership pledged to undertake economic stimulus measures and OPEC reported sharply lower crude output in July.
NYMEX September WTI settled up 40 cents at $54.87/b and ICE October Brent was 41 cents higher at the close of trading at $58.64/b.
German Chancellor Angela Merkel said Friday the country's government would be willing to take on additional debt to stimulate the economy in event of further economic downturn or recession, according to media reports. The promise of action by the German government sent US stock indexes higher for a second session.
Germany's second-quarter 2019 GDP contracted 0.1% compared with the prior quarter, the Federal Statistics Office reported Wednesday, highlighting fears Europe's largest economy could fall into recession and contributing to roughly 3% slide in WTI and Brent futures.
Friday's higher settle put Brent and WTI up week on week by around 0.2% and 0.7%, respectively.
A bullish OPEC crude production report added further support Friday.
The bloc slashed its crude production in July to 29.61 million b/d, an 8.2% drop from June, OPEC said in its closely watched monthly oil market report. The production decline was led by Saudi Arabia, which said it pumped its lowest level in more than five years, but several member states reported output far below the quotas they had committed to under a deal aimed at bolstering oil prices.
The decline in production should tighten oil supply in the second half of 2019, but further cuts are likely needed to prevent a crude build-up in 2020, the report said.
OPEC analysts raised their projections of global demand for the bloc's crude to 31.66 million b/d in the third quarter and 30.17 million b/d in the fourth quarter, indicating that if OPEC members maintain their current production levels, oil inventories should see a significant fall.
But the call on OPEC crude is expected to retreat to 28.85 million b/d in the first quarter of 2020 and 29.39 million b/d in the second quarter, the report said.
NYMEX September ULSD settled 21 points higher at $1.8128/gal and September RBOB was up 2.04 cents at $1.6568/gal at market close.
