Oil prices continue their upward trend, largely driven by OPEC+ supply cuts and inventory reductions in the United States. West Texas Intermediate has surpassed the $72 per barrel mark, anticipating a weekly increase of over 2%.
Key factors contributing to the current rise in oil prices include:
- OPEC+ supply cuts and actions by Saudi Arabia: Saudi Arabia, a leading member of OPEC+, has significantly raised the prices of its oil for Europe and the Mediterranean region after announcing an extension of unilateral supply cuts of 1 million barrels per day. This move aims to support oil prices and balance the market. Additionally, Russia has also announced a reduction in oil exports.
- Inventory reductions in the United States: Recent official data has shown a decrease in national crude oil inventories in the U.S. by 1.5 million barrels, reaching the lowest level since the beginning of the year. There have been notable reductions in oil inventories in the key storage hub of Cushing, Oklahoma, as well as gasoline and distillate inventories.
- Resilient oil prices: Despite tightening monetary policies, weak Chinese recovery, and pressure on futures, oil prices remain at high levels. The increase in prices this week occurred amid a broader decline in risky assets, as reliable employment data in the U.S. confirmed expectations of continued interest rate hikes by the Federal Reserve.
The cancellation of Saudi Arabia’s official selling prices is a sign of growing oil demand. The market is experiencing tension, which is reflected in a broader risk appetite. Further price growth will depend on supply dynamics, inventory levels, and the global economic situation.
