Brent crude futures gained $1.06, or 0.9%, to settle at $120.57 a barrel, its highest level since May 31. U.S. West Texas Intermediate (WTI) crude gained 91 cents, or 0.8%, to $119.4.
Oil prices rose about 1% on Tuesday, with U.S. crude hitting a 13-week high on supply issues, including the lack of a nuclear deal with Iran, and the outlook of demand growth in China, which is easing lockdowns to control the pandemic.
Looking ahead, analysts polled by Reuters predict U.S. crude inventories fell last week. A decline in crude inventories could further support prices. [EIA/S] [API/S]
The American Petroleum Institute (API), an industry group, will release its inventory report at 4:30 p.m. EDT (2030 GMT) on Tuesday. The U.S. Energy Information Administration (EIA) released a report at 10:30 a.m. EDT (2:30 p.m. GMT) on Wednesday.
Robert Yawger, executive director of energy futures at Mizuho, said “several numbers” in the EIA report are “within striking distance to historic lows,” possibly including crude storage. for the country, crude storage in Cushing, Oklahoma and crude storage in Strategic Petroleum Reserve.
Brent crude futures gained $1.06, or 0.9%, to settle at $120.57 a barrel, its highest level since May 31. Settlement top of August 2008.
The United States said Iran’s demands to lift sanctions were preventing progress on reviving the 2015 nuclear deal. Analysts said a deal could add 1 million barrels a day to the global oil supply.
The U.S. EIA has projected U.S. crude oil production and oil demand to increase in 2022. [EIA/M]
Prices were also supported by expectations of a recovery in demand in China, where the capital Beijing and the commercial center of Shanghai returned to normal after two months of closure.
Moreover, analysts doubted that global oil supplies would increase much after last week’s OPEC+ decision to bring forward production increases.
The increase in quotas for OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, including Russia, is less than the loss of Russian crude resulting from Western sanctions, analysts said, adding nor does it solve the shortage of petroleum products. .
Trafigura’s CEO said oil prices could soon hit $150 a barrel and rise this year, with demand destruction likely by the end of the year.
Goldman Sachs raised its Brent oil price forecast by $10 to $135 a barrel for the period between the second half of 2022 and the first half of next year, citing an unresolved structural supply shortfall.
In other supply issues, Libya’s Sharara oilfield was shut down again on Monday evening and in Norway more than one in 10 offshore oil and gas workers are planning a strike from Sunday if mediation state-negotiated pay fails.
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