The price of oil has been negatively impacted by recent events and decisions around the world. The oil market has been affected by all this: Crude Oil WTI – Brent crude oil.
One of the effects was the oil price rally on Wednesday after data showed a decline in US crude inventories for the fourth week in a row.
China and America are the largest importers of oil in the world.
The Energy Information Administration (EIA) reported a massive drawdown of 9.5 million barrels of crude oil for the week ending July 5.
Which confirms and exceeds the estimate of the American Petroleum Institute of 8.13 million barrels.
The day’s figure comes after an estimated 1.1 million barrels of oil inventories in the last week of June.
The Energy Information Administration reported a 1.5 million barrel draw last week, compared to a 1.6 million barrel drop the previous week.
Average gasoline production was 10.4 million barrels per day, compared to 9.9 million barrels in the previous week.
In distilled fuel, the Authority reported an increase in inventories of 3.7 million barrels, compared to an increase of 1.4 million barrels in the previous week.
Average production last week was 5.4 million barrels per day, compared with 5.3 million barrels last week.
Oil prices continued to rise, making their fourth daily gain in a row.
The oil market faces some upward pressure on crude oil even as demand grows.
- Tensions between the United States and Iran
- As oil producers begin evacuating employees from their Gulf of Mexico platforms before a possible storm.
- In addition to the tension in the Middle East chronic now.
- News that Russia’s oil production fell near its lowest level in three years in June.
- Supported later by the API inventory report.
- Concern over the direction of the global economy continues, such as fears of an open military conflict in the Middle East only with a negative impact.
- The US has seen some major declines in oil stocks for weeks in a row, another trend helping the oil rally.
Demand for oil appears fragile, and cracks in the global economy are also significant.
But there is a reason that WTI oil prices may rise in the coming weeks.
And also the reasons that affected the prices of oil, both types of crude oil WTI and Brent International Oil:
OPEC has recently cut output, ensuring at least 1.2 million barrels per day remaining offline for another 9 months.
However, the unexpected supply cuts have hit Russia over the past few months
Due to the pollution crisis of the Drozba pipeline, Russian oil production fell to its lowest level in three years.
With production of 10.79 MB per day in early July, Russia produces nearly 400,000 bpd below the agreed level as part of OPEC cuts.
A power outage has disrupted operations at Venezuela’s main refinery complex, threatening further turbulence on production and exports in the oil market.
The refinery has a capacity of 940,000 bpd.
Another factor that could work in a bullish direction for crude oil is the almost certain decision by the US Federal Reserve to cut interest rates later this month.
Federal Reserve Chairman Jerome Powell testified before Congress on Wednesday, acknowledging that growth had slowed all over the world, inflation was still low, and trade fears dominated.
Based on investors’ position, the markets identified the possibility of cutting 25 basis points by close to 100 per cent.
All these factors work in one direction. Demand remains a major concern.
To know more:
- Do not forget to join our channel on Telegram here
- Open a trading account from here
- View our subscription plans from the link