Oil Prices Edge Up 1% Following OPEC Report Easing Concerns on Demand
On Monday, oil prices experienced a more than 1% increase following OPEC’s monthly market report, which alleviated concerns about declining demand. Additionally, worries about potential supply disruptions emerged due to a U.S. investigation into suspected violations of Russian oil sanctions.
Brent crude futures saw a rise of $1.09, equivalent to a 1.3% increase, settling at $82.52 per barrel. Simultaneously, U.S. West Texas Intermediate (WTI) crude futures also increased by $1.09, or 1.4%, settling at $78.26 per barrel.
Oil prices were also lifted by reports of the U.S. Treasury Department cracking down on Russian oil exports, UBS analyst Giovanni Staunovo said.
Treasury sent notices to ship management companies for information on 100 vessels it suspects of violating Western sanctions on Russian oil, a source who has seen the documents told Reuters.
The U.S. Energy Information Administration (EIA) said last week the country’s crude oil production this year will rise by slightly less than expected and demand will fall. On Monday, the EIA forecast U.S. oil output would decline in December for the second consecutive month.
Despite these demand-related worries, there’s a suggestion that oil prices might have reached a bottom. Following a decline of about 4% last week, marking their first three-week consecutive drop since May, Fawad Razaqzada, an analyst at City Index, indicated that prices may have stabilized.
“Given that oil prices have weakened in the last few weeks, Saudi Arabia and Russia will likely continue with their voluntary supply cuts into next year. This should therefore limit the downside potential,” Razaqzada said.
