Oil wins for the third week in a row
Oil wins for the third week in a row: Oil prices continued to rise and reached multi-year highs at the close of trading over the weekend.
This leads to higher oil prices for the third week in a row.
The main morale driving crude oil came from improved demand prospects around the world,
with higher COVID-19 vaccination rates helped lift pandemic restrictions.
Evest- follows what is happening in the commodity trading markets, and relays them directly to you.
Oil in a week
On Friday, the price of Brent crude futures closed for delivery in August 2021, rising 17 cents to the US $72.69 a barrel.
which is the highest level since May 2019.
Similarly, the price of West Texas Intermediate crude for delivery rose in July 2021 by 62 cents to the U.S. $70.91 a barrel.
Again, this is the highest price for U.S. crude since October 2018.
Over the week, Brent rose by 1% while West Texas Intermediate crude rose by 1.9%.
the third weekly gains in a row for the benchmark oil price.
According to analysts
demand is returning faster than supply and the market will need more supply to meet that demand.
The Organization of Petroleum Exporting Countries (OPEC +) and its allies said on Tuesday,
1 June, that they would abide by agreed supply restrictions.
According to analysts, Brent appears to have found a new level at over $70,
and the summer and global economic recovery continue to bullish for oil demand in the second half of the year.
IEA (International Energy Agency) monthly report
IEA (International Energy Agency) said in its monthly report that OPEC + needs to increase production to meet the planned demand for recovery to pre-epidemic levels by the end of 2022.
The Paris-based Energy Watch said: “OPEC + needs to increase production to maintain an adequate supply of the global oil market.”
It also stressed that the growing demand and short-term policies of countries ran counter to calls by the IEA to end new oil, gas, and coal financing.
“In 2022, there is room for the 24-member OPEC + group led by Saudi Arabia and Russia to increase crude oil supply by 1.4 million barrels per day above its July 2021 and March 2022 targets.” the agency said.
Analysts’ views on rising oil prices
In the meantime, Goldman Sachs has confirmed that the expected price for Brent crude oil will reach $80 a barrel this summer.
The main sentiment of rising prices stems from the release of the COVID-19 vaccine, which boosted global economic activity.
“Oil prices are rising amid clear signs of a steady recovery in demand,” said Commerzbank.
Andy Lebow of Lipo Oil Associates in Houston said: “The release of vaccines in North America and Europe helped restore demand at the same time as OPEC + production, which eventually helped raise oil prices.”
“data showing that road traffic is returning to pre-Covid- 19 levels in North America and most of Europe. ” ANZ Research analysts said in a note.
ANZ analysts added: “Even the aviation fuel market is showing signs of improvement,
with flights within the European region rising by 17% over the past two weeks.”
U.S. oil rigs rise to the highest level since April 2020
The weekly report from energy services company Baker Hughes Co witnessed U.S. oil rigs rose by six to 365 this week to their highest level since April 2020.
This was the largest weekly increase of oil rigs in one month.
US data supports oil
Oil made gains after U.S. data showed nonfarm jobs increased by 559,000 last month.
The United States dollar weakened after the report, making oil cheaper for other currency holders and supporting oil prices.
Meanwhile, oil production in the United States is likely to grow slower than expected, with shale oil producers adding only a limited number of units to boost production, opting instead to claim higher prices and profits.
Oil stocks are taking advantage
Oil stocks such as Royal Dutch Shell and BP are currently taking advantage of a very strong market environment.
With a Brent crude barrel and even West Texas Intermediate crude above $70 per barrel, a comfortable level has certainly been reached, as stockholders now have enough opportunities to generate abundant profits and free cash flows.
Now there can be interesting expectations that could give oil stocks such as Royal Dutch Shell and BP a good boost.
Especially after IEA statements.
Oil market
The headlines are in the IEA context on the oil market.
Accordingly, the organization expects the black gold market to recover sooner than expected.
According to the Agency, demand was to rise to pre-crisis levels by the end of 2022.
Significantly, this means that demand for oil must again reach 100 million barrels per day by this time.
In addition, the market for oil companies such as Royal Dutch Shell and BP could return to more normal levels.
From this point on, support for OPEC + may not be necessary to hold strong and stable prices for Brent crude and West Texas Intermediate at current levels.
Requirement
To support this, IEA drew attention to itself with another requirement.
The International Energy Agency, therefore, demands that OPEC + increase its funding shares. Oil production must be increased to provide the world markets with adequate oil as drafted.
However, this may show that the oil market may be in a period of change again.
Of course, these expectations have not yet been fulfilled. However,
these may be interesting times for oil stocks such as Royal Dutch Shell and BP.
Oil wins for the third week in a row