Crude oil prices rose during trading today, Wednesday, March 29 (2023), for the third consecutive session, amid fears of supply shortages.
This came with the cessation of some exports from Iraq after the decision of the International Tribunal in favor of Baghdad in its dispute with Ankara over the oil of the Kurdistan region.
Crude oil prices also received some support as fears of a global banking crisis, which weighed on the markets over the past days, eased and plunged prices to a 15-month low.
Crude oil prices today
By 08:01 AM GMT (11:01 AM Mecca time), Brent crude futures contracts – for May 2023 delivery – rose 0.57%, recording $ 79.10 a barrel.
West Texas Intermediate crude futures – delivery in May 2023 – also increased by 0.83%, recording $ 73.81 a barrel, according to what was seen by the specialized energy platform.
And crude oil prices ended their trading, yesterday, Tuesday, March 28, on the rise, to record the highest level in two weeks, amid fears of a shortage of supplies.
Oil price analysis
“Concerns about lower supply from the Kurdistan Region of Iraq and easing concern in financial markets about banking sector turmoil continued to boost investors’ appetite for risk,” said commodities analyst at Rakuten Securities, Satoru Yoshida.
Yoshida added, “Expectations that the US Federal Reserve will maintain a cautious stance in raising interest rates due to banking pressures have boosted hopes for a stronger global economy and demand for oil.”
Rakuten Securities analyst expected the bullish tone in crude oil prices to continue this week, according to Reuters.
Crude oil prices rose this week after exports of 450,000 barrels per day from the semi-autonomous Kurdistan region of northern Iraq were halted, after an arbitration decision confirmed that Baghdad’s approval was required to ship the oil.
Oil price forecast
Barclays said on Tuesday that any prolonged disruption to Kurdish exports until the end of the year would mean a rise of $3 per barrel from its forecast for Brent price of $92 per barrel in 2023.
First Citizens Bank Shares’ announcement of the acquisition of a collapsed Silicon Valley bank on Monday also sparked optimism about the state of the global banking sector.
“The recent rebound in crude oil prices is mainly driven by sentiment,” said CMC Markets analyst Leon Lee. “We can see that risk sentiment has recovered to some extent, which has revived global stock markets and crude oil.”
US oil stocks
The decline in US oil inventories last week provided some support for prices, as US crude oil inventories fell by about 6.1 million barrels in the week ending March 24, according to market sources, citing figures from the American Petroleum Institute on Tuesday.
Gasoline stocks fell by 5.9 million barrels, while distillate stocks rose by 550,000 barrels.
Analysts had expected to hear that US crude oil inventories rose last week, while distillates and gasoline stocks fell.
The US Energy Information Administration is scheduled to release its weekly report at 02:30 PM GMT (05:30 PM Mecca time) on Wednesday.
Russian oil exports
On the supply side, Russian Deputy Prime Minister Alexander Novak said that Moscow needs to focus on increasing energy exports to so-called “friendly countries,” noting that Russian oil supplies to India jumped 22-fold last year.
Separately, concerns about the sustainability of demand growth in China limited gains in crude oil prices, as a Reuters poll showed today, Wednesday, that factory activity in the country expanded at a slower pace in March, and official data is expected next Friday. .
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