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Oil Prices Rise By 8% Supported By Reduced Supplies And Optimism About US Growth

Baghdad, Oil prices rose, to their highest levels in a year, to continue recording strong gains thanks to indications of economic growth in the United States and the continued commitment of producers to curb supplies, so that Brent crude achieved a weekly gain of 8 percent.

US West Texas Intermediate crude futures rose 29 cents, or 0.5 percent, to $ 56.52 a barrel, after touching the high of $ 56.84, their highest since January 22 of last year.

The markets were encouraged by stronger than expected thanks for US goods’ demands in December, indicating the strength of the manufacturing sector, and hopes for a speedy approval by lawmakers of a plan to mitigate the repercussions of Coronavirus proposed by US President Joe Biden worth $ 1.9 trillion.

OPEC + maintained its oil production policy at its regular meeting to follow up on market developments, in an indication of the producers’ satisfaction with the contribution of their large reductions in reducing stocks, despite the unclear expectations of a recovery in demand with the continuation of the pandemic.

A statement issued by the OPEC + Joint Ministerial Monitoring Committee in its 26th remote meeting said that the committee is “optimistic about achieving a recovery in 2021”, stressing the role of the coalition’s continuous positive contributions in supporting the rebalancing of the global oil market following the outbreak of the pandemic.

The committee commended with appreciation the important voluntary production amendment undertaken by Saudi Arabia, which began on February 1 and lasts for two months, which embodies the Kingdom’s leadership role in the oil market, and affirms the need for a proactive and flexible approach adopted by all members of the Declaration of Cooperation.

“Despite the continuing uncertainty surrounding the economic outlook and oil demand in the coming months, the gradual distribution of vaccines around the world is a positive factor for the remainder of the year, as it supports the global economy and oil demand,” the statement added.

In official data, the US Energy Agency announced a decrease in commercial stocks in the country by about 1.0 million barrels during the week ending January 29, in the second consecutive weekly decline, exceeding market expectations for a decrease of 0.6 million barrels.

According to those data, the total commercial inventories in the United States decreased to about 475.6 million barrels, which is the lowest level since the week ending March 27, 2020, in a positive sign of the levels of domestic demand in the largest fuel consumer in the world.

As for US production, it stabilized the previous week without any change, to continue total production at 10.9 million barrels per day, which is the lowest level since the week ending November 13.

On the other hand, the OPEC basket of crude rose, recording $ 57.72 a barrel on Wednesday, compared to $ 56.80 a barrel the previous day.

 

Source: National Iraqi News Agency

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