Oil prices rise, as Saudis dismiss supply concerns as demand increases


Demand for oil is expected to increase by half a million barrels per day (bpd) as the power sector and heavy industries abandon more expensive sources of energy, the IEA said.



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U.S. shale producers have hesitated to invest in increased production after years of low yields

Oil prices rose 1% on Thursday after major oil producer Saudi Arabia rejected calls for more OPEC + supply and the International Energy Agency said the Soaring natural gas prices could stimulate demand for oil among power producers.

The market largely ignored an unexpected increase in crude inventories in the United States, as refiners cut production during a generally slower period for these facilities.

Brent crude futures were up 82 cents to $ 84 a barrel, a gain of 1%, and their highest level since October 2018. US West Texas Intermediate crude futures ( WTI) ended 87 cents at $ 81.31 a barrel, hitting a new seven-year closing high. .

Demand for oil is expected to increase by half a million barrels per day (bpd) as the power sector and heavy industries abandon more expensive energy sources, the IEA said, warning that the crisis energy could fuel inflation and slow global economic growth.

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At its meeting this month, OPEC + stuck to its previous agreement to increase production by 400,000 bpd per month.

In its monthly report, the IEA increased its forecast for global oil demand growth in 2022 to 210,000 bpd, and now expects total oil demand in 2022 to reach 99.6 million bpd. b / d, slightly above pre-pandemic levels.

The White House has had discussions with oil and gas producers over fuel costs, with retail gasoline prices hitting seven-year highs and winter heating bills are expected to rise. He also urged OPEC + to increase its production.

“The market is fundamentally tight,” said Mike Tran, managing director of global energy strategy at RBC Capital Markets. “Any kind of political lever that tried to dampen sentiment in the oil market is a slowdown.”

Saudi Arabia has rejected calls for further increases in OPEC + production, saying the removal of production cuts by the group shielded the oil market from the sharp price swings seen in the natural gas and oil markets. coal.

OPEC +, the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led Allies, has done a “remarkable” job as so-called regulator of the oil market, Saudi Energy Minister says , Prince Abdulaziz bin Salman, at a forum in Moscow.

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The White House has had discussions with oil and gas producers over fuel costs

At its meeting this month, OPEC + stuck to its previous agreement to increase production by 400,000 bpd per month.

US crude inventories rose a surprising 6 million barrels, above the 702,000 barrel increase expected by analysts. Production increased slightly, reaching 11.4 million bpd.

U.S. shale producers have been reluctant to invest in boosting production after years of low yields, so U.S. production remains well below late-2019 record at nearly 13 million barrels per day . On Wednesday, the EIA announced that production would rebound to 11.7 million bpd in 2022.

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“We are at 11.4 million barrels a day and it is still a very large number, but we have an economy that needs more and the European Union that needs diesel and gasoline as a crazy, “said Tim Snyder, chief economist at Matador. The economy in Dallas.

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