Crude oil prices experienced a surge, marking a fourth consecutive week of gains, propelled by Russia’s aggressive actions in Ukraine, adding to concerns about supply in an already oil cartel-burdened market.
Russia’s ongoing offensive in Ukraine, which included targeting Ukrainian food export facilities and seizing ships in the Black Sea, caused tensions to escalate after their withdrawal from a U.N.-brokered safe sea corridor agreement. This further boosted OPEC’s pursuit of $80 and above oil prices.
Suhail al-Mazrouei, the energy minister of the United Arab Emirates, emphasized OPEC’s readiness to intervene if necessary, stating that the oil cartel is “only a phone call away” from implementing measures to control the oil market.
During the New York trading session, West Texas Intermediate (WTI) for September delivery settled at $77.07 per barrel, reaching a one-week high of $77.30. Similarly, London-based Brent for September delivery settled at $81.07 per barrel, touching a one-week high of $81.23. Both benchmarks registered weekly gains, with WTI up 2.2% and Brent gaining 1.5%.
This recent surge in crude prices followed Saudi and Russian announcements of potential production cuts, as well as optimistic inflation data suggesting a less aggressive stance on interest rates by the Federal Reserve.
However, despite the gains, the market struggled to surpass OPEC’s $80 target due to disappointing growth data from China, the largest oil importer globally, and lackluster gasoline demand in the United States, even during the peak summer travel season.
Energy traders are advised to closely monitor global flash PMI readings, major energy companies’ earnings, weekly stockpile data, and upcoming energy conferences to gauge potential shifts in supply and demand. Analysts predict that WTI crude may maintain a consolidation pattern in the range of $74 to $77 in the coming week.
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