2023-08-26 10:58:21
Oil prices
Oil prices incurred losses for the second week in a row, despite their rise in the Friday session by about 1 percent, recording the highest level in a week, supported by the increase in US diesel prices, the decrease in the number of oil drilling rigs, or the outbreak of a fire at a refinery in Louisiana.
In addition, US Federal Reserve Chairman Jerome Powell said that the flexibility of the US economy may prompt the Fed to apply more interest increases in the coming period, noting that the US economy, the largest economy in the world, is growing more than expected, and that the spending method For consumers accelerating, trends that could keep inflationary pressures going in the country.
He also reiterated the Fed’s determination to keep the key interest rate high until price increases (inflation) are brought down to the US central bank’s 2 percent target.
Higher interest rates could slow economic growth and reduce demand for oil. A stronger dollar could make oil more expensive for holders of other currencies, negatively affecting demand.
A fire in the giant oil storage tank was contained Friday afternoon at the Jarryville, Louisiana, refinery of Marathon Petroleum, which has a capacity of 596,000 barrels per day.
price move
Brent crude futures increased by about $1.12, or 1.34 percent, to settle at $84.48 a barrel, but incurred weekly losses of 0.38 percent.
US West Texas Intermediate crude also rose 78 cents, or 0.99 percent, to settle at $ 79.83 a barrel, on the other hand, it recorded a weekly loss of more than 1 percent.
Throughout the month, oil prices are still on their way to record monthly gains.
Market expectations
Morgan Stanley expects Brent crude prices to receive support to settle near $80 a barrel, as the oil market is likely to continue to suffer from a deficit in the second half of 2023 before returning to a small surplus next year.
Morgan Stanley raised its forecast for Brent crude prices for the third quarter of the year to $85 a barrel from $75, and raised it for the last quarter to $82.50 from $70. Brent crude was trading at around $84 a barrel today, Friday, according to Archyde.com.
The bank said that although the production cuts implemented by OPEC will have a positive impact on oil prices in the near future, spare capacity is at its highest level in 20 years, and the group’s decline in market share may negatively affect prices in the longer term.
For his part, Phil Flynn, an analyst at Price Futures Group, said: Prices also received support from a fire in the Louisiana refinery and the decrease in the number of US drilling rigs.
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And data from the energy services company, Baker Hughes, showed in its closely watched report that in August, US energy companies reduced the number of active oil rigs for the ninth month in a row.
A fire was also contained in the giant oil storage tank on Friday afternoon at the Jarryville, Louisiana refinery of Marathon Petroleum, which has a capacity of 596 thousand barrels per day.
Adding to the pressure on market sentiment, US officials are crafting a proposal that would ease sanctions on Venezuela’s oil sector, allowing more companies and countries to import crude oil.
However, John Evans of oil brokerage PVM said the possibility of a supply deficit was not inevitable.
Talks between Turkey and the semi-autonomous Iraqi Kurdistan Regional Government over crude oil exports from northern Iraq are expected to continue after officials failed to reach an agreement to resume oil exports earlier this week.
Several analysts expect Saudi Arabia to extend voluntary production cuts of one million barrels per day for a third month in a row to include October, according to Archyde.com.
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