Rise in Oil Prices for the Seventh Consecutive Week

In global oil markets, barrel prices rose again last week, marking the seventh consecutive week of increases, thus achieving the longest growth trend since early 2022, after the International Energy Agency warned of tightening supply.

On the London market, the price of Brent crude rose by 0.5 percent last week to $86.81, while the price of a barrel on the U.S. market also increased by the same amount, ending the week at $83.19.

The price of Brent is at its highest level since January, and the U.S. WTI is at its highest since the beginning of the year. The last time oil prices rose for seven consecutive weeks was in January-February 2022, prior to the Russian invasion of Ukraine.

The rise in oil prices was supported by the IEA’s estimate released on Friday that global oil demand reached a record 103 million barrels per day in June, and it could reach a new record level in August.

OPEC, in its monthly forecast, reiterated its estimates for annual oil demand, expecting an increase of 2.25 million barrels per day in 2024, compared to 2.44 million barrels per day in 2023.

On the supply side, production has significantly slowed in recent months due to voluntary production cuts by Saudi Arabia and Russia. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, began to limit supply at the end of 2022 to strengthen the market, and in June they extended the restrictions until 2024.

If current OPEC+ targets are maintained, oil stocks could fall by 2.2 million barrels per day in the third quarter and by 1.2 million barrels per day in the fourth quarter, potentially prompting another price increase, the IEA predicted on Friday.

The outlook for a soft landing of the U.S. economy, as well as speculation that the Fed is nearing the end of its interest rate hike cycle, has improved the mood among oil traders.

– “Supply reductions and improved economic prospects have created optimism among oil investors,” emphasizes OANDA analyst Craig Erlam.