Oil prices continue to rise sharply

Oil prices WTI for July delivery rose 0.9 percent to $115.07 per barrel. Brent oil price for July delivery also increased by 1.7%, to 119.43 USD/barrel.

Oil prices rose partly due to increased gasoline demand. (Illustration image – Photo: istock)

Oil prices rose partly due to increased gasoline demand, while gasoline inventories in the United States were low. Investors believe that supply will continue to be tight as the US prepares to enter the federal holiday this weekend and also the start of the summer vacation.

According to Jeffrey Halley, analyst at Asia Pacific OANDA (based in Singapore), oil prices increased sharply as the market continued to worry about shortages in the US market.

U.S. gasoline inventories fell by 482,000 barrels last week to 219.7 million barrels, the U.S. Energy Information Administration said. Gasoline consumption usually goes up during the summer, which is the peak driving season in the country.

“The driving season in the US and strong travel demand will push prices up. Since supply has not kept up with demand, the oil market is still in a state of shortage,” said Mr. Staunovo, analyst at UBS, commenting. essay.

In addition, market participants are also closely watching the move of the European Union as the bloc continues to discuss the ban on Russian oil imports. On May 25, European Council President Charles Michel said he was confident the bloc could reach an agreement before its next meeting on May 30.

“The reduction in actual supply, coupled with more and more countries refusing to supply oil from Russia, will cause gasoline prices to rise significantly,” said Clifford Bennett, chief economist at ACY Securities.

Meanwhile, the news that the Organization of the Petroleum Exporting Countries and its partners (OPEC+) rejected calls for a rapid increase in production to cool down oil prices from the West also contributed to the upswing in the oil market, according to the report. Halley expert.

After the price of Brent oil crossed an important level 116 USD/barrel, next resistance could be 120 USD/barrel, Mr. Halley assessed. The sharp increase in the price of Brent oil is also likely to pull the price of WTI oil to the 115 region – 116 USD/bin.

OPEC+ will stick to the deal to increase oil production in 2021 and reject Western calls to boost output, according to the report. Reuters.

Western countries have repeatedly asked this group to increase production. However, OPEC+ thinks that the oil market is in balance. The price rally this year has nothing to do with fundamentals.

Under the agreement reached in July 2021, OPEC + agreed to maintain the policy of increasing production at 400,000 bpd. By June this year, the target to increase production is only 432,000 bpd, even as oil prices skyrocket this year.

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