The price of oil grows and is preparing to end July with a monthly leap not seen since 2022. Why Brent and WTI prices are increasing and what to expect.
Oil price racing into late July: Crude headed for its biggest monthly rise in more than a year on signs the market is tightening, with estimates that oil demand black gold is poised to hit a record high just as OPEC+ cuts production.
West Texas Intermediate is trading above $80 a barrel, hitting its highest since April. The US crude benchmark has rallied up nearly 14% this month, paving the way for the biggest jump since January 2022. It’s the best July performance in nearly two decades.
At the time of writing, Brent futures are also advancing and trading at $85.09 a barrel.
There are several factors that are pushing the price of oil, from increased expectations of the Fed to moves by Saudi Arabia to cut supplies. Will oil prices keep growing?
Why is oil price soaring?
Oil’s streak of progress means that New York futures have erased their year-to-date losses. Expectations that the Federal Reserve is nearing the end of its monetary tightening cycle also helped sentiment, with a weakening dollar also supporting crude oil.
A supply reduction by OPEC+, with Saudi Arabia and Russia in focus, has improved crude oil outlook. Earlier this month, Deputy Prime Minister Alexander Novak said Russia would cut crude oil exports by 500,000 barrels a day in August, with Saudi Arabia also extending its supply caps next month.
Of note, existing cuts in Riyadh have already constrained supplies, with oil inventories starting to decline in some regions, notably the US, as demand outstrips supply.
Speculators have stepped up their bullish bets on U.S. crude futures, as well as major refined commodities, whose prices have also risen in recent weeks.
“Oil prices have jumped 18% since mid-June as record demand and Saudi supply cuts have brought deficits back and the market has shed its pessimism about growth”, a Goldman Sachs analyst wrote in a July 30th note.
The bank estimated that global oil demand rose to a record 102.8 million barrels a day in July and revised 2023 demand up by about 550,000 barrels a day based on estimates from stronger economic growth in India and the United States, offsetting a decline in Chinese consumption.
However, on Monday a Reuters poll of 37 economists and analysts predicted that oil prices will stall this year as high interest rates curb demand, offsetting the impact of OPEC+ production cuts on supply.
Original article published on Money.it Italy 2023-07-31 15:10:44. Original title: Prezzo petrolio: c’è il grande balzo a luglio. Dove arriverà il greggio?
