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Oil prices soared at the
opening of trading on Friday (July 14, 2023) due to tighter supplies and
subdued inflation in the United States (US).
WTI crude oil opened with a
0.35% surge at $77.16 per barrel, while Brent crude oil opened up 0.34% at
$81.64 per barrel.
In Thursday's trading (July
13, 2023), WTI crude oil closed with a 1.50% surge at $76.89 per barrel, and
Brent crude oil also rose by 1.56% to $81.36 per barrel.
Oil prices rose at the opening
of trading on Friday, supported by tighter supplies amidst issues in Libya and
Nigeria, as well as the declining inflation in the US, which is expected to
allow the market to end the interest rate hikes in the world's largest economy.
US consumer prices moderately
rose in June at the smallest annual increase in over two years as inflation
continued to ease. Producer prices also barely increased in June, and the
annual increase was the smallest in almost three years.
Both indicators provide hope
to the market that the US Federal Reserve may be closer to ending its fastest
monetary tightening since the 1980s.
On Thursday, several oil
fields in Libya were shut down as a protest by local tribes against the
kidnapping of a former minister. Separately, Shell has suspended the loading of
Forcados crude oil in Nigeria due to potential leaks at the terminal.
The protests in Libya could
take over 250,000 barrels of oil per day out of the market. This comes amid
signs of recent supply cuts by Saudi Arabia and Russia.
Saudi Arabia and Russia, the
world's largest oil exporters, agreed this month to extend the oil cuts that
have been in place since November last year, providing further support to crude
oil prices.
Oil demand is expected to
reach a record high this year. Paris-based energy watchdogs foresee an increase
in demand for next year, although the growth is projected to be less than half
of this year's growth.
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