Oil prices near $ 74, their highest level since July

The combination of growing demand and tight supply pushed up crude prices for a fifth straight week.

West Texas Intermediate on the New York Mercantile Exchange weathered Monday’s $ 1.68 drop to increase the remainder of the trading week, including a $ 1.74 jump on Wednesday. Prices rose 68 cents on Friday to close at $ 73.98, a gain of 2.8% for the week and the highest level since at least July. Listed prices closed the week at $ 70.46, according to Plains All American.

Natural gas on NYMEX had a rough patch earlier in the week, losing 30 cents combined Monday and Tuesday. But prices were strong Thursday and Friday, climbing 17 cents and 16.4 cents respectively to end the week at $ 5.14 per million cubic feet, from $ 4.985 at Monday’s close.

“Supply disruptions continue to linger on the Gulf Coast, and we expect stocks to tighten. While global demand is expected to increase over the next few months, insufficient supply is also causing growing concern as the winter months approach. Bullish fundamentals have set oil prices and the industry for strong returns over the next several years, ”Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, told The Reporter-Telegram via email.

Still, prices comfortably above $ 70 haven’t jostled oil producers from their cautious stance this year.

PDC Energy “operated a full-time platform this year and plans to do so in 2022. We are not currently running a completion team, but do plan to resume completions in 2022 … which is consistent with our plan and has not changed with the current price hike, ”Kyle Sourk, director of corporate finance and investor relations for the Denver-based operator, told Reporter-Telegram.

Analysts credited the Organization of the Petroleum Exporting Countries and Allied Nations efforts to keep excess oil out of markets to support crude prices. They also say OPEC and its allies are cautious in their plans to increase supply as demand continues to rebound after the pandemic, a position that should continue to support commodity prices.

“I don’t expect OPEC + to change its position by adding 400,000 nominal per month as long as Brent is north of $ 65,” said Bill Farren-Price, chief intelligence officer of the analytics firm. Enverus data, to Reporter-Telegram by email. “The interesting part comes next year or at the end of the fourth quarter, when we are expecting big additions in the United States. This should soften the balances and test the dip a bit more. “

He cited a recently released ENVERUS report that said OPEC + will need to withdraw some 2 million barrels a day from the market early next year to keep prices around $ 65.

“That’s not the message they’re sending – so why would they point to potential market weakness?” he concluded.

Bloomberg cited data analytics firm Kayyros as saying global onshore crude supplies fell nearly 21 million barrels last week, led by China, while US stocks are near their lowest point. for three years. Soaring natural gas prices are expected to force some consumers to turn to oil, further tightening the market ahead of the northern hemisphere’s winter, Bloomberg said.

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