Oil prices rose by more than 2%, during trading today, Friday, July 1, 2022, to compensate for most of the losses witnessed in the previous session.
The rise came after it eased during morning trading, as supply disruptions in Libya and the expected shutdown in Norway exceeded expectations that an economic slowdown could dampen demand.
Oil prices today
The price of futures contracts for the benchmark Brent crude – for September delivery – increased by about 2.12%, to record 111.34 dollars per barrel.
The price of West Texas Intermediate crude futures – August delivery – also rose by 2.34% to $ 108.42 a barrel.
And oil prices ended their transactions, yesterday, Thursday, June 30, 2022, with a decline of about 4%, to record monthly losses, but crude achieved quarterly and semi-annual gains.
Both Brent and West Texas crude recorded monthly losses of about 6.5% and 7.8%, respectively, according to the calculations of the Specialized Energy Platform.
While Brent crude and US crude achieved quarterly gains by 6.4% and 3.3%, respectively, and rose by 44.5% and 41%, respectively, during the first half of 2022.
lack of supplies
For its part, Barclays Bank said in a note: “We continue to see price risks skewed to the upside due to tight inventories, limited spare capacity and non-OPEC+ supply response.”
Yesterday, Thursday, the National Oil Corporation in Libya announced the state of force majeure in the ports of Sidra and Ras Lanuf and the El Feel oil field, noting the continuation of force majeure in the ports of Brega and Zueitina.
The Libyan National Oil Corporation stated that production witnessed a sharp decline, as daily exports ranged between 365 thousand and 409 thousand barrels per day, a decrease of 865,000 barrels per day compared to production in normal conditions.
Elsewhere, the Ledern oil workers union said Thursday that 74 of Norway’s offshore oil workers will start a strike from July 5 and are likely to shut down about 4% of Norway’s oil production.
This comes as the government of Ecuador and leaders of indigenous groups reached an agreement to end more than two weeks of protests that led to the shutdown of more than half of the country’s oil production of 500,000 barrels per day before the crisis.
“Earlier in the session, the market took a breather from the heavy selling, as OPEC+ was not given a surprise, saying it would stick to a planned August oil production increase,” said Tsuyoshi Ueno, chief economist at NLI Research Institute.
“But uncertainty about OPEC+ policy in and after September and fears that a sharp Fed rate hike could lead to a recession in the United States and hamper fuel demand dampened sentiment,” he added.
The OPEC+ alliance, including Russia, agreed on Thursday to stick to its production strategy after two days of meetings, however, the producers’ alliance avoided discussing policy from September onwards.
Previously, OPEC+ decided to increase production per month by 648,000 bpd in July and August, up from a previous plan to add 432,000 bpd per month.
US President Joe Biden will make a three-stop trip to the Middle East in mid-July, including a visit to Saudi Arabia, putting energy policy in the spotlight as the United States and other countries face rising fuel prices, driving up inflation.
Biden said, on Thursday, that he will not directly pressure Saudi Arabia to increase oil production to curb high prices when he meets Saudi King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman during a visit this month.
“All eyes are on whether Saudi Arabia or any of the other Middle Eastern oil producers will boost production in response to US demand,” Oeno said.
A Reuters poll conducted on Thursday showed that oil prices are expected to remain above $100 a barrel this year as Europe and other regions struggle to get rid of Russian supplies, although economic risks may slow the rise.