The oil prices went up more than 2% This Tuesday, July 11, reaching 10-week highsproduct of the US dollar crashthe hopes for increased demand in developing countries and supply cuts by the world’s largest oil exporters.
The futures of Brent rose $1.71, or 2.2%, to $79.4 a barrel, while US crude West Texas Intermediate (WTI) rose $1.84, or 2.5%, to $74.83.
The closing of the Brent was the highest since April 28 and the one of WTI since May 1with the Brent in the territory of technical overbought for the second time in three days.
“The break of the recent high could be considered a bullish move that could give Brent the necessary momentum to go back above $80”said Craig Erlam, market analyst at OANDA. “Right now, the rally still has momentum,” added.
US dollar fell to two-month lows against a basket of other currencies, a day after several Federal Reserve officials signaled that the US central bank was nearing the end of its tightening cycle.
A weaker dollar makes crude cheaper for buyers with other currencies. Markets were waiting for US inflation data on Wednesday to see what will happen to interest rates. Higher rates can slow economic growth and reduce demand for oil.
The International Energy Agency (IEA) said the oil market should remain tight in the second half of 2023., citing strong demand from China and developing countries alongside recently announced supply cuts, including from Saudi Arabia and Russia. The IEA will publish new forecasts this week.
The secretary general of the Organization of the Petroleum Exporting Countries said global energy demand is expected to rise 23% by the end of 2045.
The United States Energy Information Administration (EIA) World oil production is expected to rise from 99.9 million barrels per day (bpd) in 2022 to 101.1 million in 2023 and 102.6 million in 2024, while world demand will increase from 99.4 million bpd in 2022 to 101.2 million in 2023 and 102.8 million in 2024.
Source: Ambito
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