Oil prices partially recovered today, amid renewed supply concerns after falling to a low for several months as US stock data released yesterday pointed to weak demand.
The increase in the US crude oil and gasoline stock data yesterday above the expectations and the announcement that OPEC+, which is composed of countries acting together with the Organization of Petroleum Exporting Countries (OPEC), will increase production by 100 thousand barrels per day in September, fluctuated oil prices.
The demand outlook for oil continued to be overshadowed by growing fears of economic collapse in the US and Europe, debt crunch in emerging market economies, and a strict COVID-19 policy in China, the world’s largest oil importer.
On the other hand, it partially recovered today, as the Caspian Pipeline Consortium (CPC) reported that supplies have dropped for the pipeline connecting Kazakhstan’s Caspian Sea oil reserves to the Russian Black Sea port of Novorossiisk.
With the continued weak outlook in oil, the barrel price of Brent Oil has reached the level before the Russia-Ukraine war. Brent crude oil’s closest futures barrel price fell to $96.6, while US light crude fell to $90.6 percent.
THESE LEVELS ARE CRITICAL IN OIL
According to Reuters, Leon Li, an analyst at financial services company CMC Markets, said, “The global energy market is still facing a supply shortage.” Li said West Texas crude oil is likely to release between $90 and $100 a barrel.
OANDA senior analyst Edward Moya wrote in a briefing note on the subject, “OPEC+ seems to be resisting calls to increase production because the demand outlook continues to decline. The world is struggling with the ongoing global energy crisis and will not receive any help from OPEC+.
Moya concluded, “The oil market will remain tight in the short term, which means we will see a limited decline. “Crude oil prices will return to $100 a barrel even as the economic slowdown accelerates,” he said.
Source From: Sozcu