Two Kuwaiti oil analysts saw that the rise in oil prices in trading last week to their highest levels since last November happened due to growing fears about a possible shortage of supplies during the upcoming winter and the decline in US oil stocks to reach their lowest level since last December.
In separate statements to KUNA Sunday, both analysts said that the rise in oil prices was also supported by rising hopes about the recovery of demand in China - the largest oil importer in the world - against the backdrop of the recovery of manufacturing activity there during the month of August.
In trading on Friday, Brent crude futures increased 73 cents to settle at USD 90.65 per barrel (pb), while US West Texas Intermediate crude rose 64 cents to USD 87.51 pb.
Oil analyst and Head of the Horizon Management Consulting Khaled Boodai said that the rise in oil prices is behind several reasons, the most important of which is the OPEC+ group adhering to production cuts and a state of optimism about the conditions of the global economy and financial markets, which prompted speculators to buy, pushing it to rise.
The Chinese government's move to support economic growth means more demand for oil from China, he added, pointing out that this increase in demand levels would push prices higher.
One of the main drivers for the rise in prices was the decrease in US crude oil stocks, which also means an increased demand for oil, he stated, adding that the OPEC+ group will continue to be coherent, given the common interests among the members.
He expected oil prices to remain high until the end of 2023 over the continuation of the factors that led to the current rises, indicating that prices may exceed the USD 100 per barrel threshold during the second half of 2024.
On his side, Kuwaiti oil analyst Ahmad Karam said that the recent OPEC+ decisions to reduce oil production, in addition to some voluntary cuts from some OPEC+ countries, happened as an attempt to support the balance of oil markets to reach the desired levels for all and obtain fair prices.
Karam underscored the importance of maintaining the current levels of oil prices for the OPEC+ countries, given their heavy dependence on oil revenues to cover their general budgets or development projects.
The current oil prices, which range at USD 90 pb, are acceptable to all parties, he stated, pointing out that there is no need for any additional action in the current period by OPEC+, except for the continuation of its recent reduction decisions for a longer period.
The ongoing Russian-Ukrainian tensions helped raise oil prices due to escalating fears of a shortage of global oil supplies, he mentioned, explaining that raising interest rates, in addition to rising global inflation rates, also contributed to raising oil prices.
All KUNA right are reserved © 2022. Provided by SyndiGate Media Inc. (Syndigate.info).