Oil Rises to Settle over $75 a Barrel
by Bloomberg | Jordan Fitzgerald and Julia Fanzeres
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil gained for a second session as expectations waned that OPEC and its allies will allow the market to become oversupplied.
West Texas Intermediate rose to settle above $75 a barrel, rebounding from the four-month lows it hit earlier in the week after OPEC+ decided to start adding some supply to the market in October. Ministers have since reiterated that the group retains the option to pause or reverse the production changes if necessary. Russia’s deputy prime minister added that his country will pare output to make up for exceeding quotas earlier this year.
Technical factors also aided the gains, as the selloff had pushed both Brent and WTI into oversold territory on their 14-day relative strength indexes, indicating the price reaction was overdone.
Earlier this week, Brent fell below $80 for the first time since February following the OPEC+ meeting. The decision would start adding barrels to a market beset by persistent concerns about demand and robust supplies from outside the group. The perception that geopolitical risks to crude supplies are ebbing has also added to the declines.
“It is now increasingly clear that there is a limit to how far OPEC+ is willing to go, how much volume it is willing to shed before ‘enough is enough’,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. As a result, the oil market is much more sensitive to growth in both global demand and non-OPEC+ production — primarily US shale, he said.
Still, geopolitical risks remain amid ongoing conflicts in the Middle East. Israel warned Hezbollah that war is an option after the Lebanese group mounted several attacks.
In a potentially bearish sign for the market, Saudi Aramco lowered prices for all of its oil to Asia next month, the first reduction since February. In the US, weekly commercial crude inventories rose, according to Wednesday’s EIA data.
Prices:
- WTI for July delivery rose 2% to settle at $75.55 in New York.
- Brent for August settlement gained 1.9% to $79.87 a barrel
by Bloomberg | Jordan Fitzgerald and Julia Fanzeres
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas