Oil prices recorded the longest series of increases since mid-2022, due to multiple reports expecting an increase in demand and the extension of Saudi Arabia, the world’s largest oil exporter, to cut production in the coming months.
Brent crude futures touched $87 a barrel on Friday, while US West Texas Intermediate crude futures rose above $83 a barrel upon settlement. Oil thus reinforced a series of rises that extended over 7 weeks, and is the longest series of gains since June of last year.
International investment banks expect prices to continue to rise in the coming period. The US bank, “JP Morgan Chase”, indicated, on Friday, that crude prices are expected to reach $ 90 a barrel by next September.
This coincided with a report by the International Energy Agency, which indicated that global demand for oil rose to a record high in June, and may soar even higher in August, amid strong consumption in China. A monthly report issued by the Organization of the Petroleum Exporting Countries “OPEC” last Thursday predicted that the markets would witness a severe shortage in supply exceeding two million barrels per day in the current period.
Bloomberg news agency quoted Natasha Kaneva, an analyst at JP Morgan Bank, as saying: “We believe that prices will continue to rise until they reach the level of $ 90 a barrel. The main market indicators indicate a rapid shortage of supply in the direct physical trading markets.”
The problem of undersupply is transferred to the markets for fuel products. Gasoline and diesel oil prices rose much more than their natural levels during this period in the United States, affected as well by the reduction of production in refineries due to breakdowns and maintenance operations.
In a move that analysts see aimed at calming oil prices, Bloomberg points to signs of an agreement between the United States and Iran, as Iran transferred 4 American citizens from prison to house arrest recently. This agreement may lead to an increase in the supply of oil in the market by the OPEC member state, according to the US agency. However, US national security spokesman John Kirby said on Friday that the two countries are not holding active direct negotiations over Iran’s nuclear program.
And last Wednesday, the Iranian Tasnim Agency quoted the CEO of the National Iranian Oil Company, Mohsen Khajesteh Mehr, as saying that Iran intends to increase oil production by about 250,000 barrels per day, to reach 3.5 million barrels by the end of next September, in a direction opposite to the efforts of the coalition. OPEC +” to cut supplies to boost prices globally.
2023-08-12 23:44:02
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