July 14, 2024
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Oil Prices Surge to Four-Month High on Diminished Exports, Demand Signals

Oil prices on Monday surged by approximately 2% to reach a four-month peak, buoyed by diminished crude exports from Iraq and Saudi Arabia, alongside indications of robust demand and economic expansion in both China and the United States.

Brent futures escalated by $1.55, equivalent to a 1.8 percent gain, settling at $86.89 per barrel. Simultaneously, U.S. West Texas Intermediate (WTI) crude climbed by $1.68, reflecting a 2.1 percent increase, to settle at $82.72.

These advances propelled both benchmarks into technically overbought territory, with Brent reaching its highest settlement since October 31 and WTI achieving its peak since October 27.

Oil Prices Set to End the Week at 4% Gain

Oil Prices Rise on Strong U.S. Demand and Supply Concerns

In other energy markets, U.S. gasoline futures reached their highest level since August 31. On the supply front, Iraq, OPEC’s second-largest producer, announced intentions to reduce crude exports to 3.3 million barrels per day (bpd) in the forthcoming months to offset its OPEC+ quota overages since January, a move expected to slash shipments by 130,000 bpd compared to the previous month.

In Saudi Arabia, OPEC’s leading producer, crude exports experienced a second consecutive monthly decline, dropping to 6.297 million bpd in January from 6.308 million bpd in December.

Meanwhile, in Russia, attacks on energy infrastructure by Ukraine have led to the idling of approximately seven percent of refining capacity in the first quarter, according to a Reuters analysis.

Consequently, refinery outages are anticipated to compel Russia to boost oil exports through its western ports in March by nearly 200,000 bpd to approximately 2.15 million bpd.

In the United States, oil production from top shale-producing regions is forecasted to surge in April to its highest level in four months, as per a federal energy outlook.

In China, the world’s largest oil importer, factory output and retail sales surpassed expectations in the January-February period, indicating a robust start to 2024.

This positive data provided relief to policymakers amidst lingering weakness in the property sector, which continues to exert downward pressure on the economy and confidence levels.

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