Oil prices increased 3% in the past week

Oil prices US light sweets delivered in July increased by 2 USD to more than 118 USD/barrel. The price of Brent oil for July delivery also increased by the same amount to more than 119 USD/barrel.

Oil prices are still rising even though the Organization of the Petroleum Exporting Countries and its partners (OPEC+), has decided to increase crude oil production to compensate for the decline in Russia’s output. Additionally, China’s end to the COVID-19 lockdown in Shanghai could boost demand in an already tight market. Meanwhile, US crude inventories fell by 5.1 million barrels for the week ended May 27.

The current oil market is not only having problems with crude oil supply. Refining capacity is also a big problem. The output of oil refineries in the world is now nearly 3 million barrels per day lower than in 2019 also due to the lack of investment by countries in the past time.

Oil prices rose even though OPEC + will increase production more strongly in July. At its meeting on June 2, OPEC+ agreed to increase output by 648,000 bpd in July, after increasing by 432,000 bpd in previous months.

Energy analyst at economic research firm Commerzbank Research (Germany) Carsten Fritsch said that OPEC + has accumulated gains in the next three months into two months. In other words, more oil will be entering the market in no time.

According to the latest estimates, OPEC+ is pumping into the market practically 2 million bpd below its own target output, a production level already deemed insufficient. meet market demand. Therefore, the increase of 650 thousand barrels per day in July and August, although higher than before, does not bring the market many positive signals.

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