The oil price is set to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the United States, the world’s biggest oil consumer.
WTI futures travel above 81 dollars a barrel and Brent crude drops slightly to 85.70 dollars a barrel. Prices have risen about 5% since the start of the month, reaching their highest level in more than seven weeks. There are various reasons that suggest an increase in prices.
Because the price of oil can still rise
Oil headed for its first consecutive weekly gain since early April as a surprise drop in inventory levels in the United States, coupled with signs of strong demand for petroleum products, signaled favorable conditions for the world’s top consumer.
Other bullish signals include a forecast ofAmerican Automobile Association that a record 71 million Americans will travel during the July 4th holiday period in the United States.
“Overall, IEA data suggests a contraction in US oil market”, said Commonwealth Bank of Australia analyst Vivek Dhar, referring to the Energy Information Administration. However, “In the short term, we believe that the growth of Chinese oil demand that disappoints market expectations is the main downside risk to consider”he has declared.
“The seasonal increase in demand, as shown by the latest EIA data, the renewed confrontation between Israel and Hezbollah and the hurricane season could sustain price strength until the summer”Citi analysts said in a note.
“Even the signs of one stronger demand in Asia they strengthened sentiment. Oil refineries across the region are restoring some idled capacity after maintenance.”according to experts at ANZ Research.
The crude oil has risen this monthrecovering sharply after that OPEC+ presented a plan to bring some barrels back to market. Banks including Goldman Sachs Group Inc. have said they expect global oil consumption to outstrip supply, reducing inventories and supporting prices.
