Global crude oil prices have continued their upward trajectory for the fifth consecutive week amid demand optimism among the investors and tight supplies. Crude oil prices are up by around 13 percent for the month. The current price level was last seen in mid-April earlier this year.
The sustained rise in prices fuel by bullish demand projections comes from the fact that the central bank in both the US and the Europe are likely nearing the end of their interest rate hike policies – raising global energy demand outlook. While the demand is recovering in the US, economic stimulus is also there in China, which will further bolster the prices in the coming weeks.
On the supply side, crude oil inventories look tight encouraged by supply cuts from the OPEC plus alliance in the latest round as well as the decline in US oil inventories. In the upcoming meeting in September, the key member of OPEC plus – Saudi Arabia is expected to further the supply cut. The market is of the view that the Kingdom will extend one million barrels of oil per day in the September roundup, which will provide additional support to the oil market. This is based on the fact that the extended oil cartel – OPEC plus had a consensus to restrict oil supply into 2024. Also, Saudi Arabia announced a cut for July 2023, extend another for August 2023, and most likely extend it further. These factors point towards a rising price scenario for crude oil at least till September 2023.
Even for the rest of the year, the energy markets look optimistic and ready for continued growth as favorable economic outlook and demand recovery across the world make a case for bullish movement in crude oil prices.
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