US refineries cut production across the board in the third quarter due to deteriorating margins and plant renovations

Crude oil futures rose for the fourth consecutive business day on Friday, rising weekly for the first time in five weeks, supported in particular by tightening stocks in the US and risk premiums surrounding tension in the Middle East.

Analysts said the fall in the number of new US weekly unemployment insurance claims announced early Thursday morning contributed to reassuring investors who were concerned about labor market conditions.

Crude oil also received support from China's consumer price index, which rose at a slightly faster pace than expected last month.

According to Reuters, ActivTrades analyst Pierre Baylet said, “Since China's inflation rate has exceeded expectations, the positive momentum has further strengthened. In this situation, it's no wonder that the price per barrel is testing the $80 level,” he said.

Mr. Baylett added, “There is a risk that heightened geopolitical tension in the Middle East will benefit the price per barrel, increase the possibility of conflict, disrupt regional production, and reduce global crude oil supply.”

Most recent monthly NYMEX crude oil (CL1:COM) ended this week at 76.84 dollars/barrel of +4.5%, including a 0.8% increase on Friday, and the most recent monthly Brent crude oil (CO1:COM) for October, including a 0.6% increase on Friday, ended this week at 79.66 dollars/barrel of +3.7%.

The most recent monthly NYMEX natural gas (NG1: COM) that passed in September was 2.143 dollars/mmBTU of +8.9% this week, and recorded a weekly rise for the first time in 4 weeks, including a 0.7% increase on Friday.

US refiner executives said this week that production will be cut this quarter as profit margins remain low and companies plan to increase downtime for maintenance as summer fuel demand declines.

At the beginning of this year, refineries operated at an operating rate of 95% of the industry average, and although there were benefits for car drivers due to excessive gasoline inventories, profits declined, so “profit margins may increase if supply is reduced,” Tudor Pickering Holt analyst Matthew Blair told Reuters.

Marathon Petroleum (MPC) announced this week that it plans to operate 13 refineries in the third quarter with a total crude oil acceptance capacity of 90% of 3 million barrels per day. This is down from 97% in the second quarter. Valero Energy (VLO) plans to lower its processing rate to approximately 2.86 million barrels/day compared to 3 million barrels/day in the previous quarter, and the Philips 66 (PSX) is scheduled to operate in the second quarter at an operating rate of 98%, which is a high level for the first time in 5 years, and then operate the plant in the first half of 90%.

Energy (NYSEARCA: XLE) represented by the Energy Select Sector SPDR Fund ETF had the second strongest performance (+1.1%) in the stock market this week.