Home Business Oil rises to its highest levels since May

Oil rises to its highest levels since May

Oil rises to its highest levels since May

Oil rose on Tuesday driven by cuts in Saudi and Russian production and forecasts from the US Energy Information Agency (EIA) that demand will exceed supply in the coming months.

Brent barrels for September delivery rose 2.20% in London to US$79.40, the highest closing value since late April.

New York, a barrel of WTI for August, rose 252% to $74.83, also the highest level in more than two months.

The EIA estimates that global inventories will decline over the next five quarters, meaning demand will outstrip supply until the end of 2024, according to a monthly report published on Tuesday.

“We expect production cuts and increased demand to push prices higher,” says the EIA, which forecasts Brent crude to hit $81 a barrel by the end of the year, and $84 next year.

“There are fewer barrels on the market,” Mizuho’s Robert Yawger said, referring to reduced Saudi production and Russian exports, the first in July and the second in August.

“Market smoke is picking up,” Commerzbank’s Carsten Fritsch said in a note. He noted that bullish positions had increased last week after falling to their lowest level in ten years.

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