YORK: A four-month high was reached by oil prices on Monday, driven up by a two percent increase in oil exports from Saudi Arabia and Iraq as well as indications of increased demand and economic development in China and the US.
By 1:50 pm EDT (1750 GMT), Brent futures had increased by $1.45, or 1.7pc, to $86.79 a barrel, while US West Texas Intermediate (WTI) crude had increased by $1.54, or 1.9pc, to $82.58.
With Brent expected to settle at its highest level since November 2 and WTI expected to close at its highest level since October 27, this moved both benchmarks into technically overbought territory.
US gasoline futures were expected to close at their highest price since August 2023 in other energy markets.
In terms of supply, Iraq, the second-largest producer in Opec, announced that it will lower its crude exports to 3.3 million barrels per day (bpd) in the upcoming months in order to make up for over its Opec+ quota since January. This means that shipments will drop by 130,000 bpd from the previous month.
Iraq produced much more oil in January and February than was planned when the Organization of the Petroleum Exporting Countries (Opec) and its allies, including Russia, decided to support the market in January. This group of countries is known as Opec+.
Crude exports from the top producer in Opec, Saudi Arabia, decreased for a second consecutive month in January, from 6.308 million bpd in December to 6.297 million bpd.
According to a Reuters study, strikes by the Ukrainians on Russia’s energy infrastructure resulted in the shutdown of almost 7% of the country’s refining capacity during the first quarter.
Refinery outages, according to market players, may force Russia to boost oil exports through its western ports in March by over 200,000 barrels per day, or 2.15 million barrels per day.
A federal energy projection predicts that in the US, oil output from the leading shale-producing regions would reach its highest level in four months in April.
Escalating Need
China, the world’s largest oil importer, saw more factory output and retail sales in the January–February period than anticipated. This represents a strong start to 2024 and provides policymakers with some respite, even though the economy and confidence are still being negatively impacted by the property sector’s deterioration.
“Today, crude oil is up.” In a report, analysts at the energy consultancy firm Gelber and Associates stated that the demand for crude oil from China remains a significant factor.
