Oil prices rose on Thursday, supported by concerns over tight global supplies amid rising demand in the United States.
Brent crude futures rose $1.08, or 1.2%, to $113.12 a barrel by 11:43 a.m. ET, U.S. West Texas Intermediate crude rose $1.07, or 1.1%, to $108.01 a barrel.
The gains came after the International Energy Agency (IEA) said the global oil supply would fall by 1.4 million barrels per day (bpd) in 2023 as sanctions on Russia and rising costs weigh on production.
The IEA also said that oil demand would grow by 2.1 million bpd in 2023 to 101.6 million bpd.
This suggests that the market will be in a deficit of 0.7 million bpd in 2023, which could support prices.
However, there are also concerns that oil demand could weaken in the second half of the year as rising interest rates and inflation weigh on economic growth.
OPEC and its allies, commonly called OPEC+, are anticipated to meet next week to discuss production levels.
The group is currently pumping about 432,000 bpd above its target, but it is still being determined if they will be willing to increase production further.
Overall, the outlook for oil prices in the near term is uncertain. Supply concerns could support prices, but demand could weaken if the global economy slows.
Here are some of the factors that could impact oil prices in the near term:
- The outcome of the OPEC+ meeting: If OPEC+ agrees to increase production, it could weigh on prices. However, it could support prices if the group keeps production levels unchanged.
- The global economic outlook: If the global economy slows down, it could lead to weaker demand for oil and lower prices. However, if the global economy continues to grow, it could support prices.
- The war in Ukraine: The war in Ukraine is also a major factor that could impact oil prices. If the war continues, it could lead to further disruptions to oil supplies and higher prices. However, if the war ends, it could lead to lower prices.
Overall, the outlook for oil prices in the near term is uncertain. Considering… investors assess the supply and demand fundamentals, the market will continue to be pretty unpredictable.
