Breaking News
Investing Pro 0

Oil settles up 1% on tight supply, U.S. crude at 13-week high

Commodities Jun 07, 2022 20:21
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A flame burns from a tower at Vankorskoye oil field owned by Rosneft company north of the Russian Siberian city of Krasnoyarsk March 25, 2015. REUTERS/Sergei Karpukhin/File Photo

By Scott DiSavino

NEW YORK (Reuters) - Oil prices gained about 1% on Tuesday, with U.S. crude settling at a 13-week high on supply concerns, including no nuclear deal with Iran, and prospects for demand growth in China, which is relaxing lockdowns to control the pandemic.

Looking ahead, analysts polled by Reuters forecast U.S. crude inventories fell last week. A drop in crude stockpiles could further support prices. [EIA/S] [API/S]

The American Petroleum Institute (API), an industry group, will issue its inventory report at 4:30 p.m. EDT (2030 GMT) on Tuesday. The U.S. Energy Information Administration (EIA) reports at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Robert Yawger, executive director of energy futures at Mizuho, said "several numbers" in the EIA report are "within striking distance of historical lows," including possibly crude storage for the country, crude storage at Cushing, Oklahoma and crude storage in Strategic Petroleum Reserve.

Brent futures gained $1.06, or 0.9%, to settle at $120.57 a barrel, its highest since May 31. U.S. West Texas Intermediate (WTI) crude gained 91 cents, or 0.8%, to $119.41, its highest settlement since March 8 which matched an August 2008 settlement high.

The United States said Iran's demands on sanctions-lifting were preventing progress on revival of the 2015 nuclear deal. Analysts have said a deal could add 1 million barrels per day of world oil supply.

The U.S. EIA projected U.S. crude production and petroleum demand will both rise in 2022. [EIA/M]

Prices also drew support from expectations demand would recover in China, where the capital Beijing and commercial hub Shanghai have been returning to normal after two months of lockdowns.

Also, analysts doubted global oil supplies would rise much following last week's OPEC+ decision to bring forward production increases.

The quota increase from OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia, is lower than the loss of Russian crude resulting from Western sanctions, analysts said, adding that it also fails to address a shortage in oil products.

Trafigura's CEO said oil prices could soon hit $150 a barrel and go higher this year, with demand destruction likely by the end of the year.

Goldman Sachs (NYSE:GS) increased its Brent oil price forecasts by $10 to $135 a barrel for the period between the second half of 2022 and the first half of next year, citing an unresolved structural supply deficit.

In other supply concerns, the Sharara oilfield in Libya was halted again late on Monday and in Norway, more than one in 10 offshore oil and gas workers plan strike action from Sunday if state-brokered wage mediation fails.

Oil settles up 1% on tight supply, U.S. crude at 13-week high
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email