Oil Price Surge: Supply Constraints and Economic Factors Drive Market Growth

2023-07-28 19:34:37
Closing price: Oil prices posted their sixth session of increases in seven trading days on Friday, boosted by supply constraints as the US economy presents a more attractive face than expected.The price of a barrel of Brent BRENT Brent or North Sea crude is a variation of crude oil serving as a benchmark in Europe, listed on the InterContinentalExchange (ICE), a stock exchange specializing in energy trading. It has become the first international standard for setting oil prices. North Sea for September delivery gained 0.89%, to close at $84.99. In session, it crossed the threshold of 85 dollars for the first time since mid-April.

As for the barrel of West Texas Intermediate (WTI WTI West Texas Intermediate (WTI), also known as Texas Light Sweet, is a variation of crude oil that serves as a standard in pricing crude oil and as a commodity for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy.) American of the same maturity, it gained 0.61%, to 80.58 dollars.

The session was eventful, prices searched for a long time for direction before opting for green shortly before the close.

For Bart Melek of TD Securities, the last minute reversal was made possible by the falling dollar, the rise of Wall Street as well as the decline in bond yields, all of which indicate a “decent appetite for risk”. .

“Many in the market see a controlled landing for the American economy, so no brutal recession,” he explained. “They also anticipate a significant stimulus plan in China, which would help the demand” for black gold.

???????? As for supply, Russian Energy Minister Nikolai Shulguinov said on Friday, according to the Tass news agency, that Russia had already started to cut exports in July to align with the target of a drop of 500,000 barrels per day in August.

“We will honor the commitments we have made,” the official said.

“As demand increases in the second half of the year, we will test the limits on additional capacity” in the industry, ExxonMobil CEO Darren Woods warned on Friday during the conference call presenting the results of the band.

“Options to increase supply significantly are limited,” said the entrepreneur.

???????? Since the coronavirus pandemic, US oil companies have prioritized balance sheet strength, debt reduction and share buybacks over investing in additional capacity.

In the United States, the number of wells in operation has fallen further and is at its lowest level in 16 months, according to figures released Friday by the oil services group Baker Hughes.