08:44 AM EDT, 06/21/2024 (MT Newswires) -- Oil was mostly steady early on Friday, sticking close to a seven-week high set a day earlier, as a report showed U.S. inventories fell last week on improving summer demand and tight supply.

West Texas Intermediate crude oil for July delivery was last seen down US$0.02 to US$81.25 per barrel, while August Brent crude, the global benchmark, was down US$0.07 to US$85.64.

Since dropping to the lowest since early February on June 4, prices have since climbed 12%, closing Thursday at the highest since the end of April on improving summer demand and a drop in U.S. oil inventories reported yesterday by the Energy Information Administration.

"Crude oil reached a seven-week high after a US report showed declines in crude and fuel stocks, as the expected summer deficits amid strong demand is starting to show. US implied demand for gasoline reached last year's level while jetfuel demand has reached a five-year high," Saxo Bank noted.

Still, there are expectations that prices may not have much further to climb over the summer, even as supply remains light amid 2.2-million barrels per day of voluntary OPEC+ production cuts continuing through the third quarter.

"We think that peak summer demand risks falling short of providing a meaningful catalyst to shock prices higher. Looking at last year (which saw a similar, albeit more mild, physical market soft patch after spring turnarounds), it wasn't until Saudi exports

dropped by more than a million barrels per day from the start of the summer and the very peak of seasonal demand that prices were able to inflect meaningfully higher. Fast -forward to today, we think the current fundamental setup into summer puts such an inflection point out of reach," Brian Leisen, global oil strategist at RBC Capital Markets.