The increase in oil prices is also attributed to the weakening of the dollar, a consequence of messages from the U.S. central bank indicating that it will not rush to raise key interest rates.
Oil prices in global markets surged about 8 percent last week, the highest in the past month, as data on the decline in U.S. stocks raised hopes that supply and demand would soon balance. On the London market, the price of a barrel at Friday’s market close was $41.94, approximately 8 percent higher than a week earlier. On the U.S. market, the barrel also increased by 8 percent last week, reaching $39.72.
The largest weekly jump in the price of ‘black gold’ since early March is attributed, among other factors, to a report of a decline in U.S. stocks by nearly 5 million barrels the previous week, while analysts had expected an increase of 3 million. These unexpected figures have sparked investor hopes that supply and demand could soon balance.
– In the U.S., crude oil stocks are melting away as demand rises while production falls. Markets hope this trend will continue, says Scott Shelton, a broker at ICAP.
A report from Baker Hughes also indicates a reduction in U.S. production, showing that the number of rigs decreased for the third consecutive week last week. Additionally, investors hope that at an upcoming meeting in Doha, some of the world’s largest ‘black gold’ producers will reach an agreement to freeze production levels.
