Oil prices reached $72 per barrel, earning approximately a 3% increase over the week – the first rise in the past month. It is associated with optimism in the negotiations to prevent a default in the US. House Speaker Kevin McCarthy expressed hope for reaching an agreement over the coming weekend. The increased purchases of crude oil by Asian refineries have also bolstered investor sentiment.
However, oil prices still remain 10% lower compared to the beginning of the year. This can be attributed to the negative impact of China’s weak economic recovery and the tightening monetary policy of the Federal Reserve. The future interest rates set by the Fed also create uncertainty, as Central Bank officials hold differing views on whether to raise rates or pause the process.
The oil market faces additional challenges, including ongoing wildfires in Alberta, Canada’s largest energy-producing region. These fires have caused significant damage to production and created market tensions. Rystad Energy estimates that around 240,000 barrels of oil need to be shut down daily due to these fires.
Despite some price growth, the oil market continues to grapple with challenges and uncertainty. Investors remain cautious, closely monitoring the situation’s development.
