Crude oil prices rose for the second day in a row, supported by the US’s announcement of its plans to buy huge quantities of crude oil to fill its strategic reserves.
At the same time, a batch of weaker-than-expected Chinese data indicated that the soft economy failed to lower prices, as the market focused on increasing refinery productivity in the world’s second-largest oil consumer, according to Reuters.
Today, Tuesday, May 16 (2023), crude oil prices derived support that contributed to their rise, due to the continued forest fires in Canadian Alberta, which reinforced concerns about the possibility of a global supply shortage, according to information monitored by the specialized energy platform.
Crude oil prices today
By 6:30 AM GMT (9:30 AM Mecca), benchmark Brent crude futures for July delivery were up 30 cents, or 0.4%, at $75.53 a barrel.
West Texas Intermediate crude futures – for June 2023 delivery – also rose by 27 cents, or by 0.38%, to record $71.38 a barrel, according to information seen by the specialized energy platform.
The index of both benchmarks rose at the end of trading on Monday, May 15, by 1%, to reflect a series of losses in crude oil prices over the course of 3 sessions.
The rise in crude oil prices is supported by the announcement by the US Department of Energy, yesterday evening, Monday, that it intends to buy about 3 million barrels of crude oil to refill the strategic stock, which is scheduled to be received in August 2023, as the ministry requested submissions on May 31. current.
Oil price analysis
An analyst at Fujitomi Securities, Toshitaka Tazawa, said oil demand got a boost on expectations that the United States would continue to buy cargoes to fill strategic reserve stocks if WTI prices fell near $70 a barrel or below.
Tazawa explained that behind the gains there was a search for deals by some investors, after the recent sharp declines, according to statements published by Reuters and seen by the specialized energy platform.
The data of oil refinery production in China during the month of April, which was announced today, Tuesday, reveals an increase of 18.9% in its production over the past year 2022, to reach the second highest level of production in its history ever.
During the past week, Brent and West Texas Intermediate crude futures fell for the fourth week in a row, due to fears of a recession in the United States, and fears of defaulting on government debt in early June.
Fires in Alberta, Canada
At the same time, the widespread fires in Canadian Alberta forced more than 30,000 people to migrate from their homes, and shut down the production process of more than 319,000 barrels of oil equivalent per day, which represents about 3.7% of Canadian production.
This coincides with the preparation for a decrease in global crude oil supplies, during the second half of this year, with some countries of the OPEC + alliance starting to cut additional voluntary production by 1.66 million barrels per day, starting from this May.
The new voluntary cut is in addition to the official cut approved by the OPEC+ coalition, during its meeting last October 2022, set at two million barrels per day.
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